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Kenya avoids debt reorganization in common G20 framework

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By Duncan Miriri

NAIROBI, March 10 (Reuters) – Kenya will not seek to review its debt under a G20 initiative because it fears it will reduce its ability to raise funds in global capital markets, a senior official said on Wednesday. responsible for the Treasury.

The G20 group of major economies introduced a “common framework” to help developing countries cope with the financial pressure of COVID-19 by allowing them to suspend bilateral debt service and then restructure their debts.

“We are not,” Haron Sirima, head of the Treasury’s debt management office, told reporters when asked if the government would seek to restructure its debt under the framework, which also involves private creditors. . He did not give more details.

Neighboring Ethiopia, which said it would go through “debt processing” through the common framework in January, suffered downgrades as a result.

Kenya could raise funds in international financial markets later this year if it does not get enough cheap funds from lenders like the World Bank, Sirima said.

The government will also use new issuance of sovereign bonds to refinance maturing debt and manage its liquidity and liabilities, he said.

The impact of the COVID-19 pandemic has weighed on Kenya’s tax revenues at a time when more of its debt is falling due and while it is still grappling with yawning budget deficits.

In January, it reached debt service suspension agreements with the Paris Club and other creditors, including China, covering the six months through the end of June this year.

Under the agreements, which are part of the G20 initiative to offer debt relief to poor countries, Kenya is deferring payments worth $ 600 million due during the period.

The deferred amount, which includes $ 378 million for China alone, will be paid over five years after a one-year grace period. (Edited by Larry King) (([email protected]; Tel: +254 20 4991239; Reuters messaging: [email protected])) Keywords: KENYA DEBT / (UPDATE 1, PIX )

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