World Bank Warns On Kenyan Loans

The World Bank has issued a warning on the cost of Kenya’s commercial loans.

Kenya owes the World Bank around $5 billion and is also estimated to have Chinese debts worth around $6 billion. The Bank has also leant Kenya $732 million in budget support this year.

The international lender has cautioned that further commercial loans could see the country struggle to make repayments if the money borrowed was not invested in sufficiently productive projects.

According to reports by Business Daily the Bank’s Vice-President for Africa Hafez Ghanem stated that while Kenya’s debt levels are not yet at the tipping point concerns have been raised regarding the prospect to meet future repayments, noting that the cost of borrowing must be lower than the return on investment to prevent this from happening.

Kenya’s public debt now stands at around 60 per cent of gross domestic product (GDP).