The government is projecting to spend Sh475 billion to service debt in the next financial year, House Committee has learned.
This will be an increment from Sh242.1 billion used for the same in the 2022-23 financial year.
National Treasury Cabinet Secretary Njuguna Ndung’u told the Budget and Appropriations Committee a Eurobond worth US$2 billion (approximately Sh241.8 billion) will be maturing on June 24, 2024.
“To settle the 2024 Eurobond at maturity at minimum costs and risk, the government is considering several options,” he told the committee.
He said the government is considering undertaking buybacks or a bond switch.
He added that the government is also considering bilateral and multi-lateral concessional funding to buy back the bond.
“The National Treasury is at an advanced stage of procuring lead managers to provide advisory services next few weeks. In the meantime, the government will meet all other external debt service payments due through revenues and refinancing,” he said.
Ndung’u added that Kenya Revenue Authority is implementing measures agreed upon with the National Treasury on the Rapid Revenue Initiative.
He said the measures are expected to narrow the gap in revenue collection before the close of the financial year.
“However, we are aware that we will close the year with some significant shortfall,” he added.
He said the National Treasury, as such, is expected to submit to the National Assembly a revised Supplementary Estimates II which will reflect reduced revenue.
