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Kenya is looking to borrow $4.1 billion from external lenders, and is reportedly in the process of negotiating 44 loan agreements. This follows parliamentary approval last week of an increase in the country’s debt ceiling to $85.7 billion, opening the door for another $38 billion on top of existing debt of $56 billion in June.

Kenya continues to binge on external debt despite repeated warnings about its sustainability – most recently from the World Bank. The debt to GDP ratio currently stands at around 62%.

It’s doing so in the face of clear signs that African economies are lurching towards a debt crisis.

In 2018, 46% of African countries were in debt distress or at high risk. Average external debt payments on the continent doubled between 2015-2017, from 5.9% to 11.8%. Much of this is commercial borrowing, accounting for 32% of total debt, and 55% of interest payments.

Given the continent’s borrowing spree of the last two years – $25 billion from Eurobonds in 2018 alone, the third consecutive annual record – this should be expected to increase. In Nigeria debt servicing is already eating up two-thirds of revenues.

Kenya’s apparent disregard for all of this is symptomatic of general complacency from African governments, which seem content to play down or simply deny the problem.

Worrying, especially against the backdrop of dimming economic prospects on and off the continent.

This report reflects the views of the author alone, not those of How we made it in Africa.

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Today’s picks

From the continent

The Ibrahim Index of African Governance has warned that young Africans are facing “increasing struggles” when entering the job market, fueled by a fall in the quality of education and training provided by countries since 2014. The finding adds to concerns about a looming youth unemployment crisis across Africa. More: Reuters

At least five people have reportedly been killed in demonstrations in Guinea over a planned constitutional review that could extend president Alpha Conde’s time in power beyond the current two-term limit. The 81-year old came to power in the mineral-rich West African country in 2010. More: Al Jazeera

The global perspective

Sudan’s transitional government and rebel groups began peace talks in South Sudan’s capital Juba on Monday, aimed at ending years of internal conflict. This is part of the power-sharing agreement between the military and opposition groups, and a key condition for being removed from the US list of state sponsors of terrorism. More: Euronews

Voting has started in general elections in Mozambique, seen as an important test for an August peace agreement between the ruling Frelimo and opposition Renamo party aimed at ending years of tension following a lengthy civil war. The vote comes amid major investment into vast untapped gas reserves, which could turn the southern African country into a major international supplier. More: Reuters

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