Ukur Yatani, the outgoing Treasury Cabinet Secretary, has denied claims that Kenya was fined Ksh1.3 billion by China for defaulting on Standard Guage Railway loans.
Treasury said in a statement on Thursday, October 13, that the reports were incorrect and that the country had not failed to service the credit.
The CS also expressed confidence in Kenya’s economy, saying that all loan obligations would be met.
“We wish to state categorically that Kenya has never defaulted on the settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya.
“Furthermore, Kenya has not accumulated any debt arrears in decades to suggest difficulties in debt servicing,” read the statement in part.
In addition, the Treasury stated that Kenya would not be flagged by financial institutions outlining the SGR loan repayment model.
“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations.
“It is also important to note, that all public debt, including the SGR loans are paid from the Consolidated Fund in accordance with the Public Finance Management Act, 2012. Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure,” Treasury added.
