Japanese Ambassador to Kenya, Okaniwa Ken, has revealed that Kenya borrowed over Ksh170 billion from the South Asian country.
Speaking on Spice FM on Friday, August 26, Okaniwa explained that the loan has a grace period of 10 years within which payment can be delayed without an imposed penalty.
The envoy added that Tokyo gave President Uhuru Kenyatta’s administration up to 40 years to offset the credit facility.
Okaniwa further dismissed claims of trapping the country with loans adding that under the repayment plan, the two countries agreed on an interest rate of between 0.1 per cent and 1.2 per cent.
President Uhuru Kenyatta Signing Government Documents
“I believe our interest rate is much lower than any other source of lending, especially in the private markets,” Okaniwa stated.
Defending lending money to Kenya, the Japanese ambassador detailed that the funds were channelled towards different development projects in the country, including the Port of Mombasa.
“The money is being used for productive purposes in Mombasa and providing Universal Health coverage which will raise the productivity of the people. The problem is when the debt is not transparent and not used for its defined purpose,” Okaniwa explained.
Through Tokyo Construction Company, Japan expanded the Mombasa Port in two phases. It was also involved in the construction of the Dongo Kundu Special Economic Zone in Mombasa.
“We have already expanded two additional areas of the port. This allows more goods to be sent in and sent out because it lacked enough space for that.”
“In addition, we are actually connecting Mombasa Port to other areas. We are truly interested in building a special economic zone. When the project is completed, it will connect the Port area and Mombasa city,” the envoy detailed.
He further added that part of the loan deal included agreeing to no artificial limit to the amount Kenya can borrow. This allows Kenya to apply for more loans from Japan.
Okaniwa, however, advised the leaders to set up plans to ensure the country remains food sufficient and sustainable.
According to the envoy, such decisions would reduce the over-reliance on credit and even help the country’s economy grow.
Kenya’s public debt rose to a record Ksh8.56 trillion this year. Despite the growing burden of debt servicing costs, the National Treasury raised the debt ceiling to Ksh10 trillion.
Containers being offloaded at the port of Mombasa.
Daily Nation
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