Government borrowed Sh53 billion in six months
A report tabled in the National Assembly shows that the country sank deeper into debt in the last six months of 2018 after the State committed Kenyans to repay Sh53 billion in loans.
The money includes Sh20 billion borrowed for restructuring of the troubled Kenya Airways and another Sh906 million facility to deal with drought in northern Kenya.
The Kenya Airways facility was taken to repay a syndicated loan that had been received to restructure the operations of the airline in 2016, and was signed between the Government and Eastern and Southern Africa Trade and Development Bank.
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The drought resilience loan was to "strengthen drought resilience and climate change adaptive capacities of the pastoral and agro-pastoral production systems.”
Other loans signed were Bosto Dam water supply project (Sh17.3 billion), Mwache dam project (Sh14 billion) and Aquaculture Business Development programme (Sh4 billion).
The Government signed for Sh18.25 billion loan for the Nairobi Western Bypass project, aimed at improving transport infrastructure within the city.
“The project is expected to improve the needs of the Nairobi city bypasses for the convenient transportation owing to the high population growth along the project route,” the report stated.
Other than interest payable on the loans, the taxpayer will also foot facility fees, and in some cases such as that of Kenya Airways, an annual agency fee. This is an administrative cost paid to facilitate the terms of the loan agreement.
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In the case of KQ, the Government has committed to pay Sh1 million annual agency fee and upfront fee of 2.4 per cent of the total loan facility.
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National debtLoansKenya AirwaysDrought