When the Government floated the Eurobond, President Kenyatta said Sh34.8 billion would be used to fund infrastructure projects while another Sh87.92 billion was to be factored into the 2014/2015 budget.
The President also promised that it would reduce domestic borrowing to keep interest rates at manageable levels.
Contrary to the pledges made by the government when the bond was being issued, the Parliamentary Budget Office said the Eurobond had no impact in stabilising the exchange rate.
“With respect to interest rates, the intended reduction in the borrowing rates has not been felt. The 91-day Treasury Bill rate reduced slightly in August 2014 after the bond was issued in June 2014 and stabilised until May 2015 when an upward trajectory was witnessed. This indicates that the sovereign bond did not have a huge impact on the domestic borrowing by the government,” the Budget Office said in a brief prepared for PAC.
But we still want to think that the jubilee means well for this country.
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