Nairobi — Kenya has successfully applied for the debt service suspension initiative from the Paris club, according to Treasury Cabinet Secretary Ukur Yatani.
"The Paris Club has accepted Kenya's application for debt service suspension, which now means that Sh32.9 billion of Kenya's foreign debt owed to 10 bilateral partners under the Paris Club, falling due from 1st January 2021 to 30th June, 2021," the CS said in a statement.
The country has already signed a Memorandum of Understanding (MoU) with the Paris Club, to be followed by individual MoUs which each country under the Club, covering the terms of payment post-30th June, 2021.
"In effect, the initiative apart from suspending the payments, will give us a total of five years to repay the loans, with a grace period of one year. This is not only timely, but a sign of confidence in the country and will give us the fiscal space to make the much-needed spending on the COVID-19 economic recovery strategy especially in the social,
health and economic sectors," Yatani added.
At the same time, Kenya has also applied for debt service suspension under the G-20 DSSI framework, for amounts estimated at Sh40.6 billion due from 1st January, 2021 to 30th June, 2021, from non-Paris Club bilateral creditors.
The formal approval is expected in the coming weeks.
According to the Treasury, the country will not seek debt service suspension from both its multilateral and commercial creditors, to safeguard its sovereign rating and its future access to international financial markets.