Kenya on Thursday, July 6, secured a syndicated medium-term loan worth Ksh70 billion (USD 500 million) to support the government's development agenda.
The facility was sourced by Citibank, London Branch, Rand Merchant Bank, a division of FirstRand Bank Limited (RMB), The Standard Bank of South Africa Limited (Standard Bank), Standard Chartered Bank (Standard Chartered) and their respective affiliates.
In a statement, the financial institutions announced that the money will help the Kenya Kwanza administration implement various development projects.
"The proceeds from the facility will be used by the National Treasury to finance the development projects as per the development budget approved by the Kenyan Parliament for the Fiscal Year 2022/2023," the commercial institutions announced.
Before securing the syndicated loan, Africa Export-Import Bank partnered with the facility to help monitor how President Ruto's administration will utilise the funds.
"The Africa Export-Import Bank joined the facility as bookrunner and mandated lead arranger, and its subscriptions allocated towards the longer-term tranche," the statement added.
The loan acquisition came a month after World Bank approved a Ksh138.5 billion loan to help the country ease its debt burden. In a statement dated Tuesday, May 30, the World Bank indicated that the facility will help Ruto address the weakening shilling against the US dollar.
World Bank’s senior economist, Aghassi Mkrtchyan, stated that the funds will be awarded through a Development Policy Operations (DPO) instrument.
"The DPO's support for the government's reforms will help to achieve fiscal consolidation, which is essential for reducing the debt burden and related risks in an equitable and sustainable manner," the financial institution stated.
The loans were remitted despite Ruto's sustained push to re-engineer global financial architecture. Speaking in France, Ruto argued that the lending powers should not be solely concentrated in the hands of the World Bank and International Monetary Fund (IMF).
Ruto proposed that creditors adopt a new legislation enabling nations to settle their maturing debt within a span of 50 years, coupled with a grace period ranging from 10 to 20 years.
According to Treasury data, Ruto received Ksh87.73 billion from the IMF between September 2022 - December 2022.
Conversely, the government received Ksh140 billion from the World Bank on May 30 to help the government fund the budget, the National Treasury revealed.
"The total cumulative external disbursements from project loans as of June 12, 2023, stood at Ksh170.71 billion.
"By May 19, 2023, Kenya had received a disbursement of Ksh112 billion (USD 800 million) from a syndicated facility," read the statement in part.
