International Investors Issue Ruto With Demand Over Ksh300 Billion Debt
Kenya is one of four Sub-Saharan African nations facing the maturation of Eurobonds in 2024, aiming to generate Ksh306 billion (USD 2 billion) by June of the following year.
Concerns among global investors are rising, doubting the country’s ability to raise the specified amount within the given six-month timeframe.
Faced with economic challenges, Kenya is actively seeking to refinance the Eurobond by approaching international banks.
President William Ruto’s administration is encountering difficulties in securing a refinancer, as numerous banks are stipulating liability management as a prerequisite for considering such a proposal.
Liability management refers to the strategic process of overseeing assets and cash flows to mitigate a firm’s risk of financial loss resulting from potential delays or failures in meeting its liabilities on time.
“All bankers and investors agreed that the days of heavy African sovereign bond issuance were over,” the financial report states.
Kenya currently possesses only one Eurobond, as the former President, Uhuru Kenyatta, canceled another bond a few days before the 2022 general elections.
Over the past two years, Kenya and other Sub-Saharan African nations have refrained from issuing Eurobonds, but there is an anticipation that the region will reenter the international bond market in 2024.
Due to the limited market access, many African countries have been compelled to explore alternative funding sources, including loans from the International Monetary Fund (IMF) and the World Bank.
In less than a year, Kenya has secured loans exceeding Ksh300 billion from both the IMF and the World Bank.
Bankers express confidence that although the International Monetary Fund (IMF) and the World Bank have served as the primary financiers of development projects in Kenya, it is inevitable for the country to issue another Eurobond in the future.
“They (Kenya and other countries in Sub-saharan Africa) will have to return to the international bond market at some point because while the depth of funding such agencies (IMF and World Bank) is surprising, it is not bottomless,” the bankers noted.
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International Investors Issue Ruto With Demand Over Ksh300 Billion Debt
