Kenya’s Central Bank sees room to refinance debt

Kenya's Central Bank governor Patrick Njoroge during a press conference

Kenya has room to refinance its debt and to reduce the costs of servicing the debt by lengthening the maturity profiles, the central bank governor said on Tuesday.

Kenya’s Central Bank governor Patrick Njoroge during a press conference

Patrick Njoroge told a news conference the national debt stood at 56.5 percent of gross domestic product in September. The debt has risen from 42 percent of GDP since President Uhuru Kenyatta came to power in 2013, angering opposition critics.

“There is scope for the reorganization of the debt portfolio, including replacing more expensive debt with cheaper debt,” he said.

The credit risk for banks was easing, Njoroge said, but he cautioned banks against reckless lending. Bad debts among Kenyan banks jumped to 12.4 percent of total credit last year, the highest level in more than a decade.

The economy was expected to expand by 6.3 percent this year from an estimated 6.1 percent in 2018, the governor said, driven by expansion in agriculture and services.

Policymakers held the central bank rate at 9.0 percent on Monday, citing the vibrant economy and benign inflation.