Weaker Currencies Add to East African Debt Repayment Woes

By June 2020, East African economies -Kenya, Uganda, Tanzania and Rwanda- had accumulated over U.S.$86 billion in public debt, with Kenya holding 77.11% of the debt, followed by Uganda with 17.4%, Rwanda at 5% and Uganda with 0.4%. These economies are facing a potential rise in debt servicing, owing to the depreciation of regional currencies, currently weighed down by uncertainties in the global economy. This includes the disruption of global trade by the Covid-19 pandemic and political jitters linked to the region's election cycles. Monetary authorities are concerned about currency stability, with the persistent fall in value against major foreign currencies that could make repayment of external loans an arduous task. The resultant increase in interest payments is expected to be a substantial drain on resources, which could have otherwise been used to finance development programmes.