Kenya’s Public Debt Balloons To 5.81 Trillion Shillings

Kenya’s public debt has spiraled to 5.81 trillion shillings owing to the recently signed 210-billion-shilling Eurobond raising concerns among stakeholders on Kenya’s appetite for borrowing.

The public debt is projected to hit at least 7.2 trillion shillings by the time President Uhuru Kenyatta will be leaving office in 2022.

Stats from the Central Bank of Kenya (CBK) shows that the government of Kenya borrowed at least 130 billion shillings per month in the last three months.

The National Treasury seems to be in a rush to close the national budget deficit for 2019/2020 which stood at 635 billion shillings.

China remains the biggest lender to Kenya followed by the World Bank. China’s Exim Bank is the major financier of the construction of the Standard Gauge Railway that runs from Mombasa to Nairobi.

The external debt now stands at 3.02 trillion shillings with the domestic market accounting for the remaining 2.79 trillion shillings of the total public debt.

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Kenya’s public debt has been increasing each year for the last five years as the Jubilee government borrows to “sustain its development agenda” though corruption seems to be top of the agenda.

In the last five years, the debt has been expanding by an average of 680 billion shillings. Kenya Revenue Authority (KRA) tasked with collecting and managing revenue from Kenyans has over the years been collecting revenue below the set target.

In the last financial year, the National Treasury was set to borrow 631.6 billion shillings but ended up borrowing 770 billion shillings.

The World Bank and the International Monetary Fund (IMF) have in the past raised concerns Kenya’s expanding and roaring borrowing appetite saying the country will not be able to pay back on time.

The government continues to insist that the government is still within the borrowing range and that there is no way “developments will be realized in a country without borrowing.”