NAIROBI, Kenya, Feb 24 – Treasury Cabinet Secretary Njuguna Ndung’u has refuted assertions by Controller of Budget Margaret Nyakang’o that the country is paying a high interest rate on loans.
In a statement yesterday, Ndung’u maintained that Kenya does not hold any loans from the World Bank or IMF at rates of 14.5 percent.
“We urge the controller of Budget to disseminate factual information to the public and uphold the integrity of the constitutional office,” he said.
Ndung’u added that Nyakang’o’s remarks risk causing confusion in the country as well as having far-reaching effects on Kenya’s relationship with global lending partners as well as foreign investors.
The Controller of Budget on Thursday while appearing before the Public Debt and Privatization Comittee raised concern over the country’s growing interest rates on debt.
She told parliamentarians that the nation paid more on its recently issued Eurobond.
The auditor went on to say that the interest rate of 10.37 percent applied to the recently bought-back debt was higher compared to the 6.87 percent the 2014 bond offered.
She added that refinancing does not solve the country’s current problems but rather postpones them to later dates, making the loans expensive in the long run.
“While interest rates have shot up everywhere over the last couple of years, a double-digit borrowing cost remains one of the most obvious warning signs that all is not well in our country. Kenya was compelled to refinance at a higher interest rate to offset the $ 2 billion bond (sh 292,000,000,000) payment looming in June 2024,” said Nyakango.
