A number of banks serving as bookrunners and arrangers of the sale said that Kenya had successfully issued USD 500 million in 3-year and 5-year Syndicated Medium-Term Loan Facilities.
In a statement released by Standard Chartered Bank Kenya Limited, the banks stated that the revenues from the loans will be used by the Kenyan National Treasury to support the development projects in accordance with the development budget approved by parliament for the Fiscal Year 2022-2023.
“The Government of the Republic of Kenya is pleased with the syndication outcome despite a backdrop of challenging credit market conditions in the emerging markets. This achievement signifies continued confidence by investors in Kenya’s economic recovery path,” the statement said, Zawya reported.
Citibank, N.A., London Branch, Rand Merchant Bank, a division of FirstRand Bank Limited and Standard Bank, both South Africa’s Standard Chartered Bank, have been appointed by the Kenyan government to handle the deal, it said in a statement.
The Africa Export-Import Bank joined the facility as a bookrunner for the longer-term tranche.
Kenya’s Finance Minister Njuguna Ndungu said in his June 15 budget speech that the government’s total spending for the year was 3.7 trillion shillings (USD 27 billion), which Parliament’s Budget Committee had set, the figures indicating a smaller year-on-year increase compared to the historical norm.
FM Njuguna Ndungu said the budget deficit for the fiscal year beginning July 2023-2024 is expected to be 4.4%.
He also said that the Kenya government expects growth of 5.5% this year and will pay off all debts as they come due, despite mounting debt burdens.
Opposition politicians speak of government plans to double the tax on petroleum products to 16%, rising costs for staple foods such as cornmeal and cooking oil, and restrained revenue collection could slow economic growth.
In their statement, the bookrunners said that Kenya’s economy — the largest economy in East Africa and a regional financial and transport hub that is strategic for trade engagements — remained resilient, growing 4.8% in 2022, compared with a Growth of 7.6% in 2021.
The growth slowdown is due to the unprecedented two-year contraction in the agricultural sector due to the ongoing drought.