Forget About Repayment Holidays, Kenya Wants Its Creditors (Ahem… China) To Cancel Some of Its Debts

The Kenyan Treasury is reportedly considering a new plan to approach its creditors to ask for outright cancellation of some of its debt, according to a report in Business Daily. Although a final decision has yet to be made, the Treasury is apparently considering the option to approach both multilateral and bilateral creditors for debt forgiveness.

Tax revenue is simply not providing sufficient revenue for the government to service its debts. In the four-month period to October, debt servicing costs consumed 58% of all revenue. Meantime, tax revenue fell by 14% during that same period due to worsening economic conditions.

While multilateral lenders like the World Bank and the IMF will probably be more accommodating to Nairobi’s request, if it’s made, there’s no indication that China will agree to such a proposal. Beijing has been clear that it will work with borrowing states to restructure loans but, at least so far, has not shown any willingness to cancel debts.

Kenya currently owes China approximately $6.7 billion, around 10% of the country’s $65 billion national debt.

While the Treasury is simultaneously considering its debt forgiveness request, it’s also in talks with both the IMF and the World Bank to borrow an additional $3.8 billion.

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The post Forget About Repayment Holidays, Kenya Wants Its Creditors (Ahem… China) To Cancel Some of Its Debts appeared first on The China Africa Project.



source https://chinaafricaproject.com/2020/11/25/forget-about-repayment-holidays-kenya-wants-its-creditors-ahem-china-to-cancel-some-of-its-debts/?utm_source=rss&utm_medium=rss&utm_campaign=forget-about-repayment-holidays-kenya-wants-its-creditors-ahem-china-to-cancel-some-of-its-debts

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