You won’t believe what RUTO has said after China fined Kenya Sh1.3 billion for defaulting on SGR loan – Look!

 Friday, October 14, 2022 – The Government of President William Ruto has refuted claims that China fined Kenya Ksh1.3 billion for defaulting in the repayment of the Standard Gauge Railway (SGR) loans.

In a statement yesterday, Ruto, through the outgoing Treasury Cabinet Secretary, Ukur Yatani, termed the reports as erroneous, adding that the country has not failed in servicing the credit.

Further, the CS expressed confidence in Kenya’s economy, adding that all loan obligations will be met.

“We wish to state categorically that Kenya has never defaulted on the settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya.”

“Furthermore, Kenya has not accumulated any debt arrears in decades to suggest difficulties in debt servicing,” read the statement in part.

Treasury also indicated that Kenya would not be flagged by financial institutions outlining the SGR loan repayments model.

The government further assured its lenders that it would meet its loan obligations on time.

“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations.

“It is also important to note, that all public debt, including the SGR loans are paid from the Consolidated Fund in accordance with the Public Finance Management Act, 2012. Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure,” Treasury added.

According to reports, the Ksh1.3 billion fine was one per cent of the amount Kenya owed China in the last financial year.

SGR, former President Uhuru Kenyatta’s legacy project, was estimated to have cost over Ksh 360 billion.