Kenya’s creditors said on Monday they have agreed to suspend the east African nation’s debt service for six months from January.
The lenders under the Paris Club Creditors said Kenya is committed to devote the resources freed by Debt service suspension Initiative (DSSI) to increase spending in order to mitigate the health, economic and social impact of the COVID-19 crisis.
“Therefore, the representatives of the Paris Club creditors have accepted to provide to the Republic of Kenya a time-bound suspension of debt service due from Jan. 1 to June 30, 2021,’’ The Club said in a statement.
The Paris Club recognised that Kenya is eligible to benefit from the initiative following an application of the term sheet of the debt service suspension initiative (DSSI) and its addendum also endorsed by the G20.
The creditors said Kenya is also committed to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet and its addendum.
“This initiative will also contribute to help the Republic of Kenya to improve debt transparency and debt management,’’ it said.
The Paris Club creditors said they will continue to closely coordinate with non-Paris Club G20 creditors and other stakeholders in the ongoing implementation of the DSSI, so as to provide maximum support to beneficiary countries.
The group of 20 major economies in May 2020 offered to suspend debt service for external debt for low-to-middle-income economies facing temporary liquidity challenges during the COVID-19 pandemic period.(Xinhua/NAN)