Kenya to avoid local debt, faces higher costs abroad
Business
By
Reuters
| Jun 25, 2016
Kenya may face higher borrowing costs abroad due to a bigger 2016/17 budget deficit but its improved management of domestic borrowing will avoid the kind of spike in government debt yields seen in the local market in late 2015, the IMF said on Friday.
Kenya’s budget deficit is forecast to climb to 9.3 percent of gross domestic product in the 2106/17 fiscal year starting on July 1, compared to below 8 percent in the current 2015/2016 financial year, a rise which has unnerved investors.
As it sought to raise funds domestically in October and November last year, yields on 91-, 182- and 364-day Treasury bills climbed above 20 percent, straining state coffers and hitting commercial bank borrowers and companies.
Armando Morales, the International Monetary Fund resident representative in Kenya, said that from July 1 Kenya would have a better cushion of domestic funds that had already been raised - more than Sh200 billion- easing some pressure on government finances in the next fiscal year.
“That is a positive development and it gives the government some room to feel that financing is not going to be tight,” he told Reuters.
READ MORE
State to shut down 25 entities, privatise others in new reforms
Why Kenya must move fast to invest in digital rights security
State, workers' pay tensions cloud function
Why the super-rich are ditching commercial property investments
S Sudan Central Bank Governor Rallies East Africans to Invest in Juba
Co-op Bank lines up billions for women-owned SMEs after German loan deal
Construction players protest state's bid to tax mining sector
Insurance sector players to explore use of AI in deepening uptake
Sugarcane farmers accuse AFA of 'siding with cartels' as prices drop
Growing demand for housing births modern mansions in Nakuru slums
- State to shut down 25 entities, privatise others in new reforms
- Forget miraa: Discovery of minerals stirs up Meru locals
- Super-rich investors bet on Kenya amid economic gloom
- Ruto's tax nightmare