President William Ruto lauded the government’s initiatives to enhance Kenya’s economic situation by diminishing debt and boosting revenue.
On Wednesday, February 21, Ruto revealed that the government saved Kes.722 billion in public debt repayment. Addressing the press in Naivasha, Ruto attributed the reduction in debt servicing costs to the Treasury’s implementation of stringent monetary policy measures for managing debt liabilities.
The head of state noted that robust debt management strategies and comprehensive fiscal and economic management policies implemented by the Central Bank of Kenya bolstered investor confidence.
“We have pursued a turnaround strategy focused on increasing tax revenue and reducing both spending and the debt accumulation. Our sacrifices and determined efforts have not been in vain,” Ruto said.
Shilling Appreciation Against Dollar
Consequently, this confidence in Kenya’s monetary policies led to the appreciation of the shilling against the US dollar, witnessing a shift from Kes.162 to Kes.142 within one week. This resulted in a reduction of Kenya’s public debt by Kes.722 billion, according to Ruto.
“In turn, this has reduced our overall debt by Kes.722 billion and also reduced our debt service costs by Kes.195 billion over the next six years, saving the country almost a trillion,” Ruto said.
The President reported that the government garnered offers exceeding six billion dollars for the new Eurobond, showcasing investor confidence in the country’s monetary policies.
President Ruto further attributed the recent oversubscription of the Central Bank of Kenya’s (CBK) infrastructure bonds, raising three times its initial target, to this robust investor confidence. The Treasury successfully raised Kes.241 billion from foreign investors who subscribed to the infrastructure bonds.
The auction of the tax-free bonds took place between January 24 to February 14, 2024, with the bonds scheduled to accrue interest semi-annually starting in August.
Kenya Clear of Debt Distress
Ruto emphasized that the successful turnaround has steered Kenya clear of debt distress, organized the finances effectively, and laid the groundwork for implementing the Bottom-up economic agenda.
The Head of State expressed confidence that the economy is on a trajectory poised to generate more jobs, wealth, and facilitate investments.
“Where we stand today as a nation, especially after the anxiety of the last one year, where many in the international community were worried about Kenya’s position and its financial ability to manage our situation, including our debt situation, I can now confidently say Kenya is no longer in the list of the countries that run the risk of debt default,” he noted.
“Our collective efforts that have been made by the Treasury and the whole of government approach that has seen us cut down on many aspects of spending to make sure that we reduce the accumulation of expensive debt and put the country on a trajectory of living within our means.”
