Tuesday, September 21, 2021 – President Uhuru Kenyatta has turned to the International Monetary Fund (IMF) for help to settle loans advanced by the Chinese Government.
This is after China declined to extend the settlement period, saying Kenya must repay the loan as agreed.
Kenya had requested an extension of loan repayment from its lenders who are members of the G20 countries, with China being one of them.
The government sought a six-month extension to December 2021 but China declined the request.
If approved, the extension would see the government saved from paying Ksh50 billion to China.
The Chinese lenders were, however, uncomfortable with the request and asked the government to seek a way of making the payments or else things will never be the same again.
The extension request was first made in January 2021, but China told Uhuru and his government to stop seeking loan holidays and meet its obligations.
The Kenyan government is now depending on IMF aid to clear the loan.
This means that the aid from the international lender will not be used to finance the budget as has been the case previously.
In a report by the Ministry of National Treasury and Planning, the government will use additional allocation of IMF reserves in Special Drawing Rights assets (SDR) to clear the loan.
It must be noted that Kenya gave up Mombasa Port as collateral for the Standard Gauge Railway (SGR) loan from China.
The Kenyan DAILY POST