This archive report was first published on 20 July 2020.
Kenya's debt has reached a staggering Ksh6.6 trillion, with the country's public debt rising by Ksh600 billion since December 2019, according to data from the Central Bank of Kenya (CBK).
As of April, the country's public debt stood at Ksh6.4 trillion, a significant increase from the Ksh6 trillion recorded in December 2019. The National Treasury had estimated in September 2018 that the public debt would hit Ksh7 trillion by the time President Uhuru Kenyatta exits office in 2022, but it is possible the government will overshoot that figure by the current trend.
The country's domestic debt stands at Ksh3.15 trillion, while the external debt stands at Ksh3.49 trillion. Banking institutions are the government's biggest lender, accounting for 54.93% of the country's total debt, followed by pension funds at 29.01% and insurance companies at 6.04%.
Despite an order by President Uhuru Kenyatta barring government officials from investing in government securities, parastatals also feature among the government's biggest lenders, accounting for 5.3% of the debt, while other investors are listed for 4.29% of the debt.
In the current fiscal year, the government is expected to service Ksh904.7 billion loans, although the government is lobbying creditors to offer moratoriums due to COVID-19. President Uhuru Kenyatta has also called for a joint COVID-19 strategy between the European Union (EU) and Africa, and has asked large economies to write off debts owed by African countries.
“I, therefore, welcome with enthusiasm the proposal to establish the Africa-Med-Europe (AME) Foundation. The Foundation will complement the existing Africa-European continental cooperation in addressing the emerging global challenges,” President Kenyatta said last week.
Conversely, the government has also found itself having to borrow to pay salaries in the current financial year, while the budget presented by Treasury Cabinet Secretary Ukur Yatani showed a deficit of Ksh823 billion.
President Kenyatta inherited a debt of Ksh1.8 trillion when he took over from former President Mwai Kibaki in 2013, and it is estimated that he will have presided over a debt increase of almost 300% during his ten-year tenure if he closes his term with a debt of Ksh7 trillion.
According to the Central Bank statistics, the country’s public debt has risen from Ksh5.1 trillion since 2013, when President Kenyatta took over from former President Mwai Kibaki.
