Relief For Kenya As China Suspends Debt Repayment Schedule

China has yielded to Kenya's request of suspending the debt repayment scheduled to begin this month.

The country had appealed to the Asian country for an extension due to the impact of the coronavirus on the economy. 

China extended the repaying period by six months, meaning Kenya will now save up to Sh55 billion after China agreed to the request.

The extension has been confirmed by National Treasury Cabinet Secretary Ukur Yatani through the DSSI which is being conducted under the G-20 framework.

“(We) had positive feedback on the matter. Now dealing with procedural issues having obtained the nod,” said Yattani.

It is not clear how much Kenya owes China, but records indicate that the amount is totaling to over Sh750 billion. 

Funds saved from the Chinese debt-repayment holiday adds to the Sh32.9 billion that the Treasury received earlier from the one offered by 10 Paris Club countries, with freed-up cash expected to be used to address the effects of the pandemic on the economy.  

The Paris Club countries that agreed to step in for Kenya include Germany, France, South Korea, Denmark, Italy, the USA, Belgium, Spain, Canada, and Japan.

 By end of this year, Kenya was expected to repay close to Sh116.8 billion to China, with a big chunk of the repayment being in principle.