Kenya may be facing a debt crisis after it failed to repay the KSh 18 billion Southern bypass loan on time thereby accumulating KSh 3.6 billion in delayed interests.
Auditor-General Nancy Gathungu said the loan is owed to Exim Bank of China and failure to repay it on time saw an increase in delayed payments rise by KSh 726 million from KSh 2.9 billion in 2020.
Gathungu warned taxpayers would have to pay more interest if the debt is not settled within agreed timelines.
“Although the management has committed to liaising with the line ministry and the National Treasury for adequate budgetary allocation and timely exchequer releases for prompt payments in the subsequent financial year, the project is at risk of incurring additional costs by way of interests and penalties with the continued delay in making the payments,” Business Daily quoted her.
Kenya is already struggling to maintain the SGR, dubbed the country’s biggest infrastructure project since independence.
When the standard gauge railway (SGR) was launched four years ago, the government was optimistic it would transform the country and rake in billions in revenues.
However, the project is turning out to be a white elephant that has consumed billions of shillings but offering less return on investment.
one of Kenya’s Vision 2030 flagship projects recorded a KSh 21.6 billion loss in the three years to May 2020.