Budget 2024-2025:Kenya plans Panda, Samurai and Sukuk bonds to fund Sh597bn deficit

By Steve UMIDHA

Kenya plans to raise undisclosed funds through new investment insecurities or bond sales in China, Japan and the Gulf regions in an effort to diversify its sources of external debt financing and fund a Sh597Billion budget deficit in the financial year 2024-2025.

The amount includes grants – which is a financial assistance support in form of money to an eligible entity to carry out an approved project or activity in support of a public purpose and not the direct benefit of the government.

In his Thursday afternoon budget speech, its finance minister Njuguna Ndun’gu said the country will diversify sources of financing through issuance of Panda, Samurai and Sukuk bonds in those financial markets as it seeks cheaper sources of funding.

It is a move also seen to be sidestepping its reliance of the US dollar by substituting it as the primary currency for financial transactions.

“The Government will maximize use of concessional financing from bilateral and multilateral institutions to improve debt sustainability and boost our credit rating position,” said Prof Ndung’u.

Further, the Treasury CS said that “Kenya meets its debt obligations promptly and no debt arrears have been accumulated.”

Adding that the public debt was projected to remain within sustainable levels on account of fiscal consolidation path that reflects decline in the ratio of debt to GDP in present value terms over the medium term.

“To improve Kenya’s debt sustainability and boost our credit rating position, the Government will continue to implement measures to enhance growth of foreign exchange earnings,” he said.