List Of 5 Loans Kenyans Should Pay On Weakening Shilling In 2024

• Kenya's external debt service increased against the backdrop of the weakening shilling in 2024
• Data from the Central Bank of Kenya (CBK) indicated that the shilling exchanged at KSh 157 per US dollar
• This pushed servicing of huge loans like the Standard Guage Railway (SGR) up by KSh 14 billion in January 2024

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Weakening Kenya shilling continues to hurt taxpayers, especially in debt repayment schedules.

According to the World Bank, President William Ruto's administration will pay $2.23 billion (KSh 351.7 billion) in June 2024 to settle external debts.

How weak Kenya shilling affects debt payment

In January 2024, the country will pay $637.02 million (KSh 100.5 billion, based on the current exchange rate) in external debt.

Business Daily reported that this is one of the country's biggest debt service outflows in 2024.

This followed a further decline in the shilling against the US dollar, which is currently exchanging at KSh 157.

"Considering that this is a US election year, if the US reverts to lower rates and quantitative easing, the shilling could stabilise. However, this seems unlikely since our trade deficit is worsening and foreign direct investments have slumped," FXPesa Market Analyst Rufas Kamau explained in an exclusive interview with TUKO.co.ke.

Loans to be paid on weakening shilling

1. SGR loan

SGR loan repayment for January 2024 grew by KSh 14 billion due to the weakening shilling.

World Bank reported that Kenya is scheduled to pay $536.9 million (KSh 84.7 billion), compared to KSh 70.2 billion paid during a similar period in 2023.

The SGR loan repayment for January 2024 accounted for over 84% of the total external debt repayment.

2. Eurobond

The country faces a debt service of $31.5 million (KSh 4.9 billion) for the $1 billion Eurobond floated in mid-2021.

The National Treasury will also be required to settle the $2 billion Eurobond contracted in 2014, which matures in June 2024.

The last interest charge on the Eurobond amounted to $68.75 million (KSh 10.8 billion).

3. Africa Trade Development Bank loan

The government will pay $23.2 million (KSh 3.7 billion) to the Eastern & Southern African Trade & Development Bank (TDB) in debt serving this year.

This is the repayment of a syndicated loan from both the Africa Development Bank (AfDB) and TDB.

In November 2023, AFDB announced a loan of €73 million (KSh 12.6 billion) to Kenya to support Phase III of the Competitiveness and Economic Recovery Support Programme.

4. France loan

Kenya owes the French government $19 million (KSh 2.9 billion) in debt servicing in 2024.

This is part of bilateral loans Kenya received from the US, Germany, France, Japan and Italy.

5. World Bank loan

The World Bank's concessional lending wing, the International Development Association, is one of the institutions that will receive a share of Kenya's debt servicing in 2024.

The lender expects a debt repayment of $8.07 million (KSh 1.3 billion) from the exchequer.

How much does Kenya owe the World Bank?

In November 2023, the World Bank reaffirmed its commitment to Kenya's economic transformation, pledging a substantial financial package of $12 billion (KSh 1.83 trillion).

The financial aid is set to be distributed over three financial years, FY24–FY26, in small packages from different institutions.

Kenya is already benefiting significantly from concessional financing, with $2 billion (KSh 304.9 billion) received annually, contributing to the nation's development objectives.