[1/2]Kenya’s Finance Minister Njuguna Ndung’u presents the Government Budget for the 2023/24 fiscal year inside the Parliament building in Nairobi, Kenya June 15, 2023. REUTERS/Monicah Mwangi/File Photo Acquire Licensing Rights
NAIROBI, Sept 27 (Reuters) – Kenya’s struggle with a heavy debt load and pressure on its hard currency reserves is not unique since other nations are facing the same situation, its finance minister said on Wednesday.
Njuguna Ndung’u was responding to a research note by U.S. investment bank JPMorgan which said on Tuesday that the East African nation was “walking a tightrope” to avoid a crisis due to a maturing dollar bond and persistent currency weakness.
“All low- and middle-income countries are walking a tightrope given the current economic constraints globally. The Kenyan case is being featured because of the Eurobond 2024,” the minister told Reuters, referring to a bond maturing next June.
The upcoming Eurobond maturity “should not be a big deal”, Ndung’u said, since Kenya can use its reserves at the central bank to pay off the debt.
“That will not (however) solve the persistent negative shocks that low- and middle-income countries are facing. A more well mapped set of solutions will be needed,” he said.
During his speech to the United Nations General Assembly in New York last week, Kenya’s President William Ruto called for an extension of the tenor of low income countries’ sovereign bonds, to help them avert a financial crisis.
He also called for the provision of a 10-year grace period, and for the creation of special drawing rights for those countries at the International Monetary Fund, to be allocated on a need basis, instead of the usual entitlement mechanism.
Reporting by Duncan Miriri
Editing by Mark Potter
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