Kenya has room to refinance government debt, central banker says

Bad debts among Kenyan banks jumped to 12.4% of total credit last year, the highest level in more than a decade.

Picture: AFP.

NAIROBI - 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.

Patrick Njoroge told a news conference the national debt stood at 56.5% of gross domestic product in September. The debt has risen from 42% 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% of total credit last year, the highest level in more than a decade.

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

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