In just four months, President Ruto takes out eight new loans.

Between September 1 and December 31, the Kenya Kwanza administration signed eight new loans totaling Sh43.4 billion. According to the Treasury, the new loans signed between the Kenyan government and commercial bilateral and multilateral creditors will be repaid between 2030 and 2047.

The eight loans signed have a total value of Sh43,381, 450,293. Njuguna Ndungu, the Treasury Cabinet Secretary, stated in a memo to MPs that two of the loans had already been repaid. The government of President William Ruto is relying on concessional loans to pay off the short-term, high-interest loans that have increased Kenya’s debt service costs.

According to the Public Finance Management Act, the Treasury must report quarterly to Parliament on all loans signed by the national government.

According to Treasury, the loans’ proceeds will be used to fund water projects, food and nutrition security, maternal health, improvements to the informal sector, and Small and Medium-Sized Enterprises (MSMEs).

In order to improve the sustainability of the access to and management of groundwater in the borderlands of the Horn of Africa, the Treasury borrowed Sh16.7 billion from the International Development Association.

“The loan will be paid off in 40 equal payments every half year. The loan has an annual interest rate of 1.25 percent and a service charge of 0.75% on the withdrawn credit balance, according to the Treasury. Additionally, the government borrowed Sh2.7 billion from Mizuho Bank Europe NV to upgrade 20 sites’ maternal and newborn units with turnkey medical equipment and refurbishment package contracts. According to the Treasury documents, “The purpose of the loan is to finance amounts payable to the exporter under the Export Contract in respect of eligible goods and services.”

Djibouti, Kenya, Somalia, and South Sudan will each receive an additional Sh5 billion to invest in strengthening resilience for food and nutrition security.

The cash, to be paid more than 30 years, was gotten from the African Advancement Asset.

In addition, a Sh2.5 billion loan from the Federal Republic of Germany was signed by the Treasury to finance goods and services that will enhance the management of waste and water in Kisii and Kericho counties.

According to the report, “The loan will be repaid in 60 equal semi-annual instalments of EURO 300 000 from May 15, 2033 to November 15, 2062.”

The loan has an annual interest rate of 0.75 percent on the amounts that have been disbursed. On unrepaid loans, the commitment charge rate is 0.25% per year.

In addition, Kenya entered into a contract worth Sh2.59 billion with the International Fund for Agricultural Development (IFAD) with the intention of expanding rural financial inclusion and green investments.

The loan aims to increase incomes for smallholders, poor and marginalized rural households, women, and young people, as well as to create equitable employment opportunities and production systems that are innovative and resilient. In addition, Kenya received loans totaling Sh7.8 billion from Germany and Sh6.2 billion from France to assist in the establishment of a center for entrepreneurship with satellites and an integrated voucher system, primarily to cover the costs of foreign exchange. The second project to improve informal settlements in Kenya will be aided by the funds obtained from the Agence Francaise De Development.

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