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Kenyan opposition says any new Eurobond could become 'odious debt'
October 17, 2016 / 6:33 AM / a year ago

Kenyan opposition says any new Eurobond could become 'odious debt'

NAIROBI (Reuters) - Kenya’s main opposition leader Raila Odinga said any new Eurobond issue by Kenya could be classified as “odious debt”, saying the government had failed to account fully for the use of funds raised in a previous issue.

Odious debt is a term used for cash borrowed by nations and subsequently not used in beneficial projects.

The government has not said it will issue a new Eurobond after raising $2 billion in 2014, but it has said it was considering a second international debt issue and has not ruled out the Eurobond route.

Odinga, who is set to challenge President Uhuru Kenyatta in an election next August, made his comments about any fresh debt issue in a statement on Sunday, after accusing the government of failure to account for $2 billion borrowed in its debut bond.

The government denied this. When Odinga made accusations of poor accounting last year, officials released what they said were details of the fund-raising and allocations to departments.

The Treasury said in June it would borrow 150 billion shillings ($1.48 billion) from external commercial sources in the fiscal year ending next June, to partly plug a 691 billion shillings hole in the budget.

Treasury did not respond immediately to a request for comment on plans for a new issue and Odinga’s comments.

On Friday, S&P raised Kenya’s outlook to stable from negative, saying strong growth would offset other risks like the fiscal and external deficits.

S&P has assigned the East African nation a rating of B+.

Reporting by Duncan Miriri; Editing by Edmund Blair

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