The Kenyan government has delayed paying public employees’ paychecks due to financial strain caused by high-interest payments, but the nation will not default on its debt repayment obligations, according to the president’s primary economic adviser.
After winning a disputed election in August on a platform promising to assist millions of people overcome poverty, President William Ruto is unable to put his plans into action owing to increasing living costs and accumulating debt.
Some market participants have suggested that Kenya, like Zambia and Ghana, may soon default on its debt as a result of the country’s large debt burden, a weakening local currency, and global market instability caused by a financial crisis.
The president’s adviser, David Ndii, has said that Nairobi has no plans to take such action.
“Our firm is not insolvent. With our assistance, restitution is achievable. That comes at a high cost, but we can afford it.” On Monday night, Ndii reported this to Citizen TV.
He cautioned that the government would need “three to four years in highly extended debt restructuring negotiations,” and that default would be a “really horrible possibility.”
Ndii observed that the government’s cash flow has been squeezed since interest payments on the domestic debt alone have climbed to 680 billion shillings ($5.09 billion) this year, up from 180 billion shillings when the debt binge started more than a decade ago.
“Unfortunately, this will be the status of things for some time,” he said.
Opiyo Wandayi, the leader of the opposition in the national parliament, declared that the administration was failing in one of its most basic responsibilities by neglecting to pay government personnel.
He said in a statement issued over the weekend that “civil personnel and legislators had gone to Easter without salaries.”
Another legislator said that the money was sent to bank accounts on Tuesday morning, but he did not respond to a call for comment on Tuesday.
Legislators were yet to be paid for March as of April 7th, despite usual payment dates ranging from March 26th to March 30th.
Ndii stated that the delays were due to financial difficulties caused by higher debt obligations.
The finance minister, Njuguna Ndung’u, did not immediately answer a phone seeking comment.
