Kenya’s upcoming $2 billion Eurobond maturity in June 2024 and its outreach to the IMF and World Bank highlight African economies' challenges with rising global interest rates.
If Kenya unlocks additional financing from the development finance institutions, it will be the latest in a series of augmentations to existing programmes, which have seen the country tap into cheaper credit from the Bretton Woods institutions. In May, Kenya tapped into a $1 billion (148.8 Khs billion) credit facility from the World Bank, revised from the initial $750 million (111.6 Khs billion) owing to the country’s requirements around budget support.
As developed economies tighten monetary policies, countries like Kenya find borrowing costs escalating. Rising interest rates consume a significant portion of the national debt-servicing budget, thereby diverting funds from vital sectors like health, education, and infrastructure.
Kenya’s Eurobond repayment challenge is emblematic of the broader African struggle. A borrowing spree in the