This archive report was first published on 15 September 2021.
September 15, 2021 - Kenya's debt burden has reached alarming levels, with the country's debt-to-GDP ratio standing at 56.5 percent, up from 42 percent in 2013.
According to Central Bank of Kenya (CBK) Governor Dr. Patrick Njoroge, the country's debt servicing costs have increased significantly, with over 40 percent of revenues going towards debt repayment in the 2019/2020 financial year.
"For every Sh100, only Sh60 is left to cover regular government functions," Dr. Njoroge told the Senate Budget and Finance Committee.
The CBK Governor attributed the increase in debt servicing costs to a spike in debt stock and changing terms on new loans, including one-off repayment of syndicated loans and Eurobonds in 2019.
However, Dr. Njoroge noted that the trend is expected to reverse in the medium term due to improving terms on new loans and the restructuring of external commercial loans with heavy maturities and high interest costs.
He also expressed concern over the limited capture of returns from investments through increased exports and taxes, saying that the country must reconfigure its external debt to build a range of infrastructure projects such as the Standard Gauge Railway and highways.
