Japan’s Ambassador to Kenya, Okaniwa Ken, revealed that Kenya had borrowed more than Ksh 170 billion from the South Asian country.
speaking on FM Spice on Friday, August 26, Okaniwa explained that the loan has a 10-year grace period during which payment can be delayed without penalty imposed.
The envoy added that Tokyo had given President Uhuru Kenyatta’s administration up to 40 years to make up for the credit facility.
Okaniwa further dismissed claims of entrapping the country with loans, adding that as part of the repayment plan, the two countries agreed on an interest rate of between 0.1% and 1.2%. %.
President Uhuru Kenyatta signs government documents
“I think our interest rate is much lower than any other lending source, especially in private markets,” Okaniwa said.
Defending the loan of money to Kenya, the Japanese ambassador clarified that the funds were channeled to different development projects in the country, including the port of Mombasa.
“The money is used for productive purposes in Mombasa and provides universal health coverage which will increase the productivity of the people. The problem is when the debt is not transparent and not used for defined purposes “, explained Okaniwa.
Through Tokyo Construction Company, Japan has expanded the Port of Mombasa in two phases. She 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 and shipped as there was not enough space for this.”
“Also, we are currently connecting the port of Mombasa to other areas. We are really interested in building a special economic zone. Once the project is completed, it will connect the port area and the city of Mombasa,” said detailed the envoy.
He further added that part of the loan agreement included the acceptance of no artificial limit on the amount Kenya can borrow. This allows Kenya to apply for more loans from Japan.
Okaniwa, however, advised leaders to put plans in place to ensure the country remains food sufficient and sustainable.
According to the envoy, such decisions would reduce over-reliance on credit and even help the country’s economy grow.
Kenya’s public debt hit a record Ksh 8.56 trillion this year. Despite the growing burden of debt service costs, the National Treasury raised the debt ceiling to Ksh 10 trillion.
Containers unloaded at the port of Mombasa.