Rich countries have suspended billions of shillings in debt payments owed by Kenya for the next six months under the G20 loan relief to allow the country to save money to tackle the coronavirus pandemic.
According to the World Bank’s COVID 19: Debt Service Suspension Initiative website, Kenya can save up to $630.8 million or Sh69 billion from the relief.
France, Belgium, Canada, Denmark, France Germany, Italy, Japan, Republic of Korea and Spain have approved the debt repayment holiday to allow Kenya to use the savings on tackling the coronavirus pandemic.
The Paris Club said Kenya has committed to seek a similar arrangement with all other of its bilateral lenders.
Kenya has cleared direct loans owed to its former colonial master the United Kingdom and Canada last year.
China is Kenya’s largest bilateral lender at $6.46 billion (Sh671.15 billion) by June 2019 more than half of which went to the standard gauge railway.
A shift in the structure of Kenyan debt has seen Beijing and private banks increase their share of the country’s foreign debt replacing traditional bilateral lenders.