Kenya borrows Sh104.7bn in eight months

What you need to know:

  • None of the loans have been disbursed according to the break down by Treasury Principal Secretary Kamau Thugge.

  • The largest amount Kenya has borrowed is Sh53.5 billion from the World Bank's International Development Association.

  • The Last Mile Connectivity project's Sh13.5 billion loan is the second largest in the schedule.

Kenya obtained loans to the tune of Sh104.7 billion between November 2014 and June 2015, according to a Treasury report submitted to the National Assembly.

None of the loans have been disbursed, according to the break down by Treasury Principal Secretary Kamau Thugge, which also indicates the repayment terms showing that the last payment for one loan is expected in 2101.

Dr Thugge submitted the list in fulfilment of the requirements of the Public Finance Management Act, which provides for him to provide a report to Parliament every four months of all the new loans obtained from outside Kenya or denominated in foreign currency.

This means that the list does not indicate the amount borrowed locally.

INFRASTRUCTURE DEVELOPMENT

Treasury does not explain how the money will be used but the biggest beneficiaries would be the development of infrastructure, the purchase of medical equipment such as Magnetic Resonance Imaging and radiology equipment.

The largest amount Kenya has borrowed is Sh53.5 billion from the World Bank's International Development Association.

It is intended to be used for the construction of roads between Lokichar and Nadapal/Nakodok in Turkana County and others which link Kenya and the border with South Sudan.

The deal was sealed in July 2015 and repayments start in 2021.

LAST MILE CONNECTIVITY

The Last Mile Connectivity project, which is aimed at increasing access to electricity by lowering the cost to Sh15,000 for those within 600 metres of a transformer has been funded to the tune of Sh13.5 billion. It is the second largest loan in the schedule.

MPs were earlier this month given a break down of how many households in their constituencies are covered in the first phase of the project, which is aimed at getting more consumers connected to the national electricity grid at a low cost.

It is funded by the African Development Fund and the repayments will start in 2019.

The African Development Fund, which has given Kenya three loans, is also funding the construction of the first lot of the Mombasa-Mariakani Highway Project, which is from Mombasa to Kwa Jomvu, to the tune of Sh12 billion.

Repayments of that loan will start in 2020.

The other project funded by the African Development Fund is the East Africa’s Centres of Excellence for Skilled and Tertiary Education in Biomedical Sciences, which will get Sh3.5 billion.

SLUM UPGRADING

Through the International Development Association, the World Bank will also be funding the slum upgrading programme, under the Kenya Informal Settlement Project, to the tune of Sh9.6 billion.

This deal was sealed in July this year, Treasury said, and repayments will start in 2031.

Treasury also sealed a deal to get Sh3.8 billion from the International Development Association for Financial Sector Support, whose benefits would be an improvement of the legal, regulatory and institutional environment.

LAKE VICTORIA

The International Development Association has also committed to provide a Sh1 billion loan as additional funding for the Lake Victoria Environment Management Project.

The government has also taken five loans for the improvement of health services: Sh400 million from KBC Bank and Sh560 million from Belgium for clinical laboratory and radiology services improvement project, Sh2.8 billion from the China Development Bank for 20 Magnetic Resonance Imaging equipment and Sh2.3 billion from the German government for health data management systems.

Spain has agreed to lend Kenya Sh600 million for the improvement of quality control laboratories for fish while the Germans will be funding, to the tune of Sh650 million, the fourth phase of the Small Scale Holder Irrigation in Mount Kenya Region.