NAIROBI, Oct 14 (NNN-KBC) — The National Treasury and Planning Ministry has vehemently denied reports alleging that China has slapped Kenya with a fine of Ksh.1.3 billion over alleged failure to repay a loan extended to the country to build the Standard Gauge Railway as agreed.
Treasury Cabinet Secretary Ukur Yatani described the reports published by a section of local media citing alleged penalties from Beijing as “erroneous and alarming” and maintained that the country has not defaulted on its debt service obligations to the People’s Republic of China, especially on account of the SGR loan.
In a statement, the CS maintains that the reports are unfounded and misleading and therefore ought not to be taken seriously.
“At no time has Kenya been flagged as a country defaulting on its external debt obligations,” Yatani said
“We wish to state categorically that Kenya has never defaulted on the settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the government of Kenya,” the CS reiterated
According to Yatani, there has been no reason for Beijing to sanction Nairobi over debt repayment issues given that Kenya is yet to accumulate any debt arrears in decades to suggest difficulties in debt servicing.
He said all public debt, including the SGR loans, are paid from the Consolidated Fund and indicated that debt service is always the first charge on the account and takes precedence over other forms of expenditure.
The SGR line between Mombasa and Naivasha was constructed courtesy of funds from Chinese lenders, chief among them; the Exim Bank of China.
The CS sought to assure Kenya’s creditors, development partners, investors, and the public that the country’s financial position remains “sound and robust.” — NNN-KBC
