Kenya has taken yet another loan, this time from Japan.
Treasury CS Ukur Yatani signed a Sh36 billion loan from Japan with JICA Chief Representative Katsutoshi Komori in Nairobi on February 27.
CS Yatani said the loan will be used for Phase I of the Mombasa Special Economic Zone Development Project.
“ I appreciate on behalf of the Government of Kenya the continued development assistance that the Government of Japan has extended to Kenya since the beginning of bilateral cooperation in 1964,” Yatani said.
“The loan will be applied for the development of SEZ with the aim of boosting the manufacturing sector in line with the government’s Big Four agenda as well as creation of new jobs for Kenya citizens,” the CS added.
The loan will be repaid in 28 years, with a grace period of 12 years and at 0.1 per cent interest rate.
Data shows that Kenya spent Sh6.3 billion shillings on loan repayment to China, second to China at Sh11.5 billion in 2017-18 Financial Year.
This is part of nearly $860 million in concessional loans and grants that Japan promised last year for the construction of a bridge in the port city of Mombasa and other infrastructure projects to support an economic zone there.
Komori told a news conference in September 2019 that a loan of about $450 million will go toward building a 1.3 km bridge linking Mombasa’s mainland to an island in the city.
Another $350 million loan and a $57 million grant will go toward developing a port, road, electricity and water supply and drainage in the special economic zone known as Dongo Kundu in Mombasa.
Kenya’s total public debt load edged closer to the Sh6 trillion mark in October last year.
The World Bank consequently warned Kenya against piling up more debt than the country can repay, even as Parliament this week approved to raise borrowing ceiling to Sh9 trillion ($85.7 billion).
