Rédaction Africa Links 24 with Daily Nation
Published on 2024-01-25 07:03:10
The Kenyan government is parting ways with the director-general in charge of debt management at the Treasury, Haron Sirima. This move comes amid escalating debt sustainability concerns that have forced the Exchequer to retreat on a plan to buy back $300 million of the $2 billion Eurobond that matures in June this year.
Sirima, who has been at the helm of the debt management unit since June 2018, confirmed his exit without divulging details surrounding his departure. He stated, “My tour of public duty has come to an end. I need to give way to young blood. I have a couple of months to go awaiting recruitment of new director-general.”
The Public Service Commission (PSC) has advertised several vacant positions, including that of the Director General Public Debt Management, with applications expected to be submitted on or before February 13.
In addition, Sirima recently found himself at the center of a governmental attack after he told the Business Daily that Kenya would not keep the promise to make an early Eurobond repayment in December.
President William Ruto had announced plans to buy back at least 50 percent of Kenya’s $2 billion Eurobond that is maturing in June this year. However, the Treasury later stated that it only paid $68.7 million as interest due on the Eurobond after dropping the initial plan to make an advance payment of the principal before the end of 2023.
Concerns about Kenya’s ability to repay the 2024 Eurobonds were cited by rating agency Fitch in July when it reversed the outlook on the country’s debt to negative. This has led to ongoing fiscal constraints and macroeconomic instability that continue to hurt the country’s creditworthiness.
In addition, the International Monetary Fund (IMF) Debt Sustainability Analysis (2022) report reveals that Kenya is already in breach of four of the six debt sustainability indicators. These indicators include the public debt to gross domestic product (GDP) ratio and the public debt to revenue and grants ratio, among others. This implies that the country is at a significantly higher risk of debt distress.
These developments have led to uncertainty surrounding the future of the country’s debt management and the management of its Eurobonds. The government has indicated that it is committed to completing the redemption in June 2024, with or without access to the capital markets.
Read the original article on Daily Nation
