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NAIROBI, Monday

Kenya’s external debt payment as a percentage of total debt service declined in the financial year (FY) 2020/2021 as compared to the previous year as the east African nation benefited from the G20 Debt Service Suspension Initiative, the National Treasury said in its annual public debt report released Monday.

The Treasury noted that the service of the Sh7.8 trillion ($70 billion) debt increased from 5.9 billion dollars in the FY 2019/20 to 7 billion dollars in the FY 2020/21. 

“However, over the period, external debt service as a percent of total debt service declined to 30.1 per cent from 34.3 per cent, while domestic debt service rose from 65.7 percent to 69.9 percent.

The fall in external debt service as a percentage of total public debt service is attributed to debt service suspension under the G20 Debt Service Suspension Initiative,” said Treasury.

Debt relief

Kenya secured debt relief under the G20 initiative and was expected to save up to 2 billion dollars between May 2020 and December 2021, according to the World Bank.

The agency noted that Kenya’s public debt sustainability ratio worsened following the adverse effects of the COVID-19 pandemic on the economy. 

Going forward, however, debt sustainability is projected to improve gradually through sustained implementation of economic recovery policy and structural reforms.   – Xinhua