LONDON (Reuters) – The Paris Club of international creditors said on Monday it had accepted a request from Kenya for a debt-servicing suspension from January to the end of June.
“Kenya is committed to devote the resources freed by this initiative to increase spending in order to mitigate the health, economic and social impact of the COVID19-crisis,” the Paris Club said in a statement on its website.
Kenya is also committed to seeking from other bilateral official creditors debt-servicing treatment in line with the agreed terms of the Debt Service Suspension Initiative (DSSI) of the G20 group of rich nations and big emerging powers, the creditors added in their statement.
Kenya changed its mind about the G20 coronavirus debt relief initiative after declining to join earlier in 2020, and Finance Minister Finance Minister Ukur Yatani said in November that it was planning to defer around $690 million in debt payments.
Joining the arrangement was important, Yatani said then, as it will help open doors for further funding from the International Monetary Fund and World Bank.
In December, the IMF said Kenyan authorities were continuing talks with the Fund on the remaining provisions of an IMF financing program for the East African country that could be presented to the IMF board in early 2021.
Reporting by Karin Strohecker; Editing by Tom Arnold and Hugh Lawson