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Government responds to claims China fined Kenya Ksh1.3 Billion over SGR loan

Government responds to claims China fined Kenya Ksh1.3 Billion for defaulting on the Standard Guage Railway (SGR) loan.

Ukur Yatani, the outgoing Treasury Cabinet Secretary, denied reports that Kenya was fined Ksh1.3 billion by China for not repaying the loans for the Standard Guage Railway.

Treasury referred to the reports as false in a statement dated Thursday, October 13, and added that Kenya had not failed to repay the loan.

The CS also voiced optimism for Kenya’s economy and reaffirmed that all loan obligations would be honoured.

“We wish to state categorically that Kenya has never defaulted on the settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya.

“Furthermore, Kenya has not accumulated any debt arrears in decades to suggest difficulties in debt servicing,” read the statement in part.

Treasury also stated that financial institutions outlining the SGR loan repayment plan will not flag Kenya.

The government also gave its lenders assurances that it would repay loans on time.

“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations.

“It is also important to note, that all public debt, including the SGR loans are paid from the Consolidated Fund in accordance with the Public Finance Management Act, 2012. Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure,” Treasury added.

The response by the government comes after reports emerged that Kenya had been fined by China for defaulting in the financial year that ended in June.

It was reported that the Ksh1.3 billion fine was one percent of the amount that was to be repaid to China in the last financial year.

Also read,

China fines Kenya Sh1.31bn over SGR loan default

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