The Kenyan President, President William Ruto has made it a priority to cut down the country’s debt and its external borrowing. Since his inauguration in September 2022, the Kenyan National Treasury has begun taking steps to swap the country’s long-term debt with longer-term issuances to ease pressure on the Kenyan economy.
In the last week, the National Treasury has begun a debt swap to convert Sh87.8 billion ($714.6 million) worth of short-term debt to long-term issuances. This swap is to ease the pressure of the debt’s maturities on the government.
The Treasury Cabinet Secretary Njuguna Ndung’u noted, “Right now, we don’t have headroom for accumulative debt, so in a sense, we have to go down into liability management. When you are buffeted by multiple shocks, the reaction is often to use your resources or borrow to overcome the crisis.”
Measures are being put in place to ensure that a counter-productive strategy is avoided while this government regulation is being used. Some of these counter-productive strategies include the careful revision of these new government policies and regulations
Also, the budget cuts being adopted by the president are being carefully revised so that it does not deter the growth of the country’s economy. Although the budget cuts are necessary to shift resources to needy areas in the economy, budget cuts in areas that are essential could lead to a recession which could affect lives negatively.