Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-03-01 16:21:48
President Ruto’s recent initiative to repay a portion of Kenya’s Eurobond, maturing in June this year, has garnered attention and set a new precedent for debt management strategies in African nations. The move by Kenya to conduct a buyback of Ksh218 billion (USD1.5 billion) from its Ksh310 billion (USD2 billion) Eurobond has been framed as part of a comprehensive approach to managing the country’s debt.
In a similar vein, Benin has followed suit by taking steps to initiate a buyback of its maturing Eurobonds with amortisation periods of 2026 and 2032. These bonds include outstanding amounts of Ksh28 billion (€176.36 million) due in 2026 and Ksh111 billion (€700 million) due in 2032. This proactive debt management strategy by Benin is aimed at optimizing the country’s financial position.
Benin’s buyback program commenced on February 28, with tender offers set to expire on March 6, and settlement expected by March 12. The early issuance of Eurobonds carries significance for countries as it provides access to external financing, enabling funding for important government projects.
In a related development, the Kenyan government announced on February 21 that it had made a payment of USD1.5 billion (equivalent to Ksh218 billion) as part of a USD2 billion Eurobond loan. President William Ruto highlighted the significance of this payment, stating that it was made four months ahead of maturity to reassure foreign investors and alleviate worries about debt default.
Ruto emphasized the financial milestone achieved by settling the buy-back of a substantial part of the 2014 Eurobonds, which were scheduled to mature in June 2024. He declared that Kenya is no longer at risk of debt default, instilling confidence in the country’s financial stability.
The efforts by both Kenya and Benin to proactively manage their debt through buyback initiatives showcase a shift in approach towards responsible financial management. By addressing maturing Eurobonds ahead of schedule, these countries are demonstrating their commitment to maintaining sound fiscal policies and safeguarding their economic well-being.
Overall, President Ruto’s initiative in Kenya and Benin’s proactive debt management strategy serve as leading examples for other African nations to consider in handling their debt obligations effectively. It sets a new standard for financial responsibility and transparency in debt management practices across the continent.
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