A Kenyan economic analyst on Tuesday urged Kenya
to avoid short-term debt in order to promote macroeconomic
Research Analyst at Genghis Capital Investment Bank, told Xinhua
in Nairobi that currently 46 percent of government revenue in
the current financial year will be devoted to debt repayment and
this figure is expected to reach 50 percent next year.
“Kenya should have
preference of long-term debts in order to reduce the percentage
of government revenues that goes to debt repayments so that more
resources are devoted for development expenditure,” Ogutu said.
He said that the
average maturity of the country’s domestic debt stands at less
than seven years.
“This means that
more public funds need to be set aside to settle debts at the
expense of other priorities such as education and health,” he
The research analyst
noted that short-term commercial debt that was virtually
nonexistent prior to the 2011/2012 financial year has gathered
momentum in recent financial years.
“More and more debt
is being contracted from commercial entities and this poses
significant refinancing risk,” Ogutu said.
He noted that with
the classification of Kenya as a middle-income country,
concessional borrowings from World Bank will be on slightly
needs be to employ innovative methods in order to access cheap
loans for its development needs,” he added.