Kenya’s internal debt swells to US$16-b
NAIROBI, Kenya (Xinhua) — Kenya’s domestic debt has surged to US$16 billion as of the end of February, a rise of about US$1 billion in the month, as the Government borrows more internally for budgetary support.
The sharp increase, latest debt data from the Central Bank of Kenya (CBK) showed yesterday, happened between February and the start of March.
At the end of January, the debt stood at US$15.1 billion before starting to rise steadily as the Government floated several Treasury bonds and increased uptake of bids from Treasury bills.
The bonds floated in February are the five- and 10-year securities whose interest rates stood at 14 and 14.3 per cent respectively.
The bonds, worth US$248 million, attracted massive interest from investors, raising more than double the amount.
The CBK received bids worth over US$533 million and accepted US$299 million, about US$50 million more than the cash it had planned to raise.
More cash was raised through the sale of Treasury bills, where investors too have flocked as the apex bank accepts more bids than it had offered.
At the end of February, the CBK data showed that the high uptake of government securities had pushed up the domestic debt to US$15.3 billion before rising to the current level.
The surge pushes up total public debt — which stood at US$30 billion at the end of the year, with the external debt contributing US$15 billion of the amount.
Growth of external debt, according to the Central Bank, was due to increased disbursements from Exim Bank China, concessional loans from the International Development Association and exchange rate revaluation.
Domestic debt is expected to surge as Government’s appetite for public cash grows.
Last week, for instance, the CBK borrowed US$200 million through the 182-day and 364-day T-bills, despite floating securities worth US$118 million.
For the 91-day bills, the bank accepted bids worth US$91 million despite seeking to raise US$40 million.
In its Budget Policy Statement released last month, the Treasury revised down by US$492 million its domestic borrowing target ,to US$1.7 billion.
With increased borrowing from domestic market, this target, noted analysts, may not be achieved.
