The Kenyan government, much like its neighboring countries are on an aggressive infrastructure development campaign to spark industrial development. However, the bulk of funds for these projects are coming from foreign lenders, particularly China.
Economics experts have sounded the alarm on Kenya’s heavy borrowing that it could undermine sustainable economic growth as the bulk of the country GDP will be used to repay loans. Worst case scenario, Kenya ending up paying for more than the worth of the loans by defaulting payments and the accrued interests accumulating too much.
It now appears the government has become somewhat innovative plans to merge the top three state-owned development institutions into one big bank. The institutions:
Industrial and Commercial Development Corporation (ICDC)
Tourism Finance Corporation (TFC)
Combined, the above three financial institutions have a bigger balance sheet and have been earmarked for consolidation to form the Kenya Development Bank (KDB). The proposed KDB will have a similar model as the African Development Bank (AfDB) or the East African Development Bank (EADB).
However, there is no official agreement on the structure of the proposed KDB, though discussion are already underway. Last month, Kenya’s National …read more