Kenya’s National Treasury has put off plans by Kenya National Highways Authority to float a KSh 150 Billion Infrastructure Bond, citing the country’s distressing public debt levels.
According to Treasury Chief Administrative Secretary (CAS) Nelson Gaichuhie, the decision has been arrived at following red flags raised by the International Monetary Fund(IMF) about Kenya’s bulging public debt.
Gaichuhie told the National Assembly Transport Roads Committee that following the warning by IMF on Kenya’s debt sustainability level, it cannot allow the Kenya Roads Board (KRB) to borrow through the bond.
Kenya’s three and half-year lending programme
Kenya is currently in a three and a half-year IMF programme that has focused on reducing the country’s debt levels as one of its key planks.
Data from the Central Bank of Kenya(CBK) shows that the Treasury has so far floated three infrastructure bonds since January this year.
The last sale was a 21-year amortized infrastructure bond worth KSh 75 Billion, floated in September 2021. The purpose of the bond is to fund infrastructure projects as outlined in the 2021/2022 National Budget Estimates.
Other infrastructure bonds were the 16-year bond in January 2021 and 18 year Bond floated in April 2021.
Available figures indicate that the Kenya Roads Board (KRB) will disburse KSh 55 Billion towards the maintenance of national road network coverage in the 2021/2022 financial year.