Kenya confident of repaying $2bn Eurobond due in June

Kenya confident of repaying $2bn Eurobond due in June
Photo by Kenny Murgor / Unsplash

Kenya seems confident they can repay the $2 billion Eurobond due in June.

Let's go deeper: The country has a debt profile of around $61.5 billion, which is around 67 per cent of its gross domestic product( GDP), with a 29 per cent currency devaluation against the dollar in 2023; its servicing cost has increased significantly.

  • With ongoing economic challenges, international and domestic investors seem sceptical about the country's ability to repay the 10-year Eurobond.
  • Kenya received $941 million from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programs
  • $624.5 million was released immediately to ease the country's financial pressure, with an additional $60.2 million disbursed under the Resilience and Sustainability Facility (RSF) arrangement. The additional resources have now positioned the country to make its $2 billion commitment, according to Central Bank of Kenya Governor Kamau Thugge.

The bottom line: According to the IMF, Kenya's public debt service consumes about 55 per cent of revenues. Its GDP growth was 5.1% in 2023 and is projected to be 5.0% in 2024. African sovereign debts are getting favourable interests from the international debt market, which puts Kenya in a good position should it meet its obligations in June.