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Another Eurobond on the way

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The government has confirmed that it is indeed planning to issue another Eurobond to raise more funds. Treasury Cabinet Secretary Henry Rotich said today the government is expanding its domestic financing and would go to international market for another Eurobond “at the appropriate time”.

Speaking today at the launch of the Regional Economic Outlook for Sub-Saharan Africa at Serena Hotel in Nairobi, Mr Rotich said the growing public debt was sustainable as long as the government continues to innovative in generate more revenues.

“The Government must access concessional loans first before issuing a Eurobond,” he said.

This comes a week after CORD leader Raila Odinga blew the whistle on new plans to issue a second Eurobond and warned against it until the government accounts for KSh250 billion issued in 2014. Raila said President Uhuru Kenyatta’s administration had proposed a second sovereign bond for listing on the Irish Stock Exchange by last Friday.

He warned that another bond issue would leave the country with no option but to declare the debt odious, also known as illegitimate debt, which means a national debt incurred by a regime for purposes that do not serve the best interests of the nation and should not be enforceable.

Raila said a significant portion of the proceeds from the first sovereign bond amounting to $999 million (Ksh9.9 billion) were not deposited into the Consolidated Fund, but the government insists the money was well-spent and allocated to various projects.

Raila, the former Prime Minister, said the money was not received and thus did not benefit the people of Kenya. Earlier this year, the International Monetary Fund said the Kenyan government accounted for the money in the same manner that other countries do. IMF first deputy Managing Director David Lipton said the money was moved to the Central Bank’s accounts and then put at the Government’s disposal.

[crp]

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