The government has resorted to another syndicated loan to offset part of the Sh1.4 trillion due this year.
The ballooning debt demands are expected to cause cash crisis as Kenya clears part of the debt.
Details have emerged that the government has borrowed a Sh100 billion syndicated loan with two regional banks as it seeks to repay the Eurobond it took three years ago.
The two banks are Eastern and Southern African Trade and Development Bank (TDB) formerly PTA bank and Standard Chartered.
Kenya is expected to repay debts amounting to Sh1.4 trillion between January and December 2019, pointing to a looming cash crisis. The total debt stood at 5.3 trillion as at June last year, up from 4.4 trillion the previous year.
This means that for every Sh100 that hits the Government coffers through taxes, loans and grants, Sh95 will be forked out to creditors, leaving the Treasury with only Sh5 to run the Government – pay salaries, run hospitals and schools, build roads and dams and release funds to the counties.
According to the 2019 Medium Term Debt Management Strategy, debt maturing within a year has increased significantly, putting a strain on Kenya’s dwindling revenues. In the period between January and December 2018, only Sh54 for every Sh100 mobilised went to creditors as debt repayment.