Chair of the Presidential Council of Economic Advisors David Ndii (pictured) has assured the country that the 2024 Eurobond redemption is fully taken care of. He said the financing has been due to assistance from the International Monetary Fund (IMF).

Ndii said that Kenya would have already defaulted were it not for the IMF. “As of now, the 2024 Eurobond is fully funded. The refinancing is fully funded…we have actually been very proactive in ensuring that we secure all the funding”, he said during the NCBA economic forum yesterday.

Kenya is expected to pay $2 billion by June 2024 for its first Eurobond loan. The loan had caused tensions in the market after the Central Bank Governor said the country will tap forex reserves to pay the loan.
Kenya now has over Sh10 trillion public debt that has caused jitters across the economy amidst high global interest rates that have kept Kenya off the Eurobond market.

“Without the IMF programme, we would probably default. Let’s be honest. As of now, the 2024 Eurobond is fully funded…we have access to the entire IMF balance sheet… I hope that settles the matter once and for all,” the sharp-tongued social media enthusiast and economist David Ndii said underlining the precarious situation the country is in.

Kenya had proposed buying back portions of the bond and the using the Central Bank of Kenya (CBK) reserves to pay off the balance. However, analysts at Moodys Investor Service said that move would amount to a default.

Kenya is witnessing an acute shortage of forex to service foreign debt at a time when her agricultural exports such as tea are facing challenges due to their secondary or luxury nature as countries put restrictions on where their forex should be spent.

Analysts at Goldman Sachs, however, remain optimistic that the country would muddle through the problems and survive the default given a strong working relationship with IMF.

President William Ruto has been keen to follow the directives of IMF such as the 16 per cent VAT of fuel, weaning off struggling state enterprises from the exchequer and many others such as selling off non performing state corporations.

Kenya has been issuing tap sales or extension of existing bonds to access funding under tight market conditions and lenders lean to the short of the yield curve by lending short term on fears the government may default.

Kenyan banks have since seen their standing on the Nairobi Securities Exchange (NSE) suffer due to their heavy exposure to the government bonds.