Jaindi Kisero in the Daily Nation
We had all expected that the government would be on top of the queue of debt-distressed African countries lining up for debt relief offered by the G20 through its Debt Suspension Initiative.
While Tanzania and Uganda moved quickly to apply for the offer, we opted out of the deal. Yet in terms of external indebtedness and the cost of debt servicing, we are in a much worse situation than them. By the measure ‘of risk of overall distress’ we are ranked as ‘high’ , Tanzania and Uganda ‘low’ and Rwanda ‘moderate’.
In terms of the money we would have saved had we taken the offer, ‘potential debt suspension initiative savings’, the World Bank puts it at $802 million compared to a paltry $148 million for Tanzania and $95 million for Uganda.
But why did Kenya opt out? The government has decided to play safe. If we took up the G20 offer, we would expose ourselves to disclosure standards in the external debt register to a level the political elite were willing to countenance. To get the relief, a country must commit to disclose all public sector-financed commitments, including debt and debt-like commitments.
Secondly, it must commit to greater transparency and agree to limit non-concessional borrowing to ceilings dictated in programmes signed with the World Bank and International Monetary Fund (IMF).