Treasury Denies China Fined Kenya Ksh1.31bn for Defaulting on SGR Loans

October 14, 2022
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Treasury CS Ukur Yatani.

The National Treasury has refuted reports that China recently fined Kenya for allegedly defaulting on the Standard Gauge Railway loan.

Media reports early Thursday morning had it that Chinese banks fined Kenya Sh1.312 billion in the year ended June for loan defaults.

But Treasury Cabinet Secretary Ukur Yatani said Kenya has never defaulted on its external debt obligations.

Yatani noted that the government prioritises debt settlement upon collection of taxes.

“We wish to state categorically that Kenya has never defaulted on its settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya,” said the CS in a Thursday press statement.

Yatani added that all public debt, including the SGR loans, are paid for from the consolidated fund in accordance with the public finance management Act, 2012.

“Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure,” he said.

Yatani also assured that Kenya’s credit score is impressive and that there shouldn’t be any cause for alarm.

“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations,” he said.

Adding: “We want to assure our creditors, development partners, investors and the general public that Kenya’s financial position is sound and robust.”

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