The Central Bank of Kenya (CBK) has raised an alarm over external borrowing.
CBK governor Patrick Njoroge on Friday disclosed that it wired Sh202 billion ($2 billion) of proceeds of Eurobond II from Citi Bank in New York to the Treasury account in Kenya on March 12, 2017.
Speaking at parliament building, Njoroge said that there is need to move into non-debt financing arrangements.
“There is less headroom for external borrowing and we need to move into non-debt financing arrangement like the Sh230 billion road from Nairobi to Mombasa. We should move from the old song of borrow and invest,” Dr Njoroge said.
He was speaking before the Finance, Planning and Trade committee chaired by Kipkelion West MP Joseph Limo.
Dr Njoroge, however, cautioned that the non-debt financing model does not just mean creating public private partnerships (PPP).
“We must also be weary of currency issue in terms of external shocks, which is an issue of great concern to us when borrowing,” the CBK boss said.