Digging one hole to fill another? Kenya's Eurobond buyback game

Kenya’s Eurobond buyback programme swaps old debt for new borrowing, leaving the overall debt burden largely unchanged. [Courtesy]

Kenya’s much hyped Eurobond buyback programme bought the government time but failed to reduce the country’s debt burden after it was financed through fresh borrowing, leaving taxpayers exposed to growing refinancing and foreign exchange risks.

The strategy, in which the country borrowed new loans to settle old ones, is now being viewed as a trade-off in which the country only avoided immediate risks but carries permanent and more expensive risks in the form of high interest payments for years to come.