On Thursday, October 13, reports emerged that Kenya had been slapped with a fine of Ksh1.312 billion for defaulting a loan that was acquired to aid the construction of the Standard Gauge Railway from Mombasa to Naivasha.
According to a report from the Treasury, Kenya was punished after failing to clear the loan in the financial year that ended in June.
It was alleged that the country could not manage to clear the debt because of the struggles with the mounting public debt.
In a statement, outgoing Treasury CS Ukur Yattani however denied the defaulting claims, saying that the report was erroneous. According to him, the country has never defaulted on any loans.
“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,” the CS said.
Yattani added that Chinese debts are among those the state had prioritized to maintain the country’s positive image to creditors.
“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. We want to assure our creditors, development partners, investors, and the general public that Kenya’s financial position is sound and robust,” he said
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