This archive report was first published on 20 September 2019.
As President Uhuru Kenyatta's term draws to a close in August 2020, his administration is set to accumulate a significant amount of public debt. According to the Treasury's draft Budget Review and Outlook Paper, the total debt is projected to jump to Sh7.65 trillion by June 2022, up from nearly Sh5.81 trillion in June 2019.
This increase in debt has been attributed to the government's efforts to implement its manifesto, which includes building new roads, a modern railway, bridges, and electricity plants. The Jubilee administration has ramped up spending since 2013 to address these infrastructure needs, driving up borrowing to plug the budget deficit.
As a result, Kenya has committed more than half of its taxes to repaying loans, leaving little cash for other essential projects such as building roads, affordable housing, and revamping the ailing health sector. In the year ended June, the country spent Sh826.20 billion on debt repayments, accounting for 57.37 percent of the Sh1.44 trillion tax collected in the period.
Public debt has been on the rise since 2013, with the country's debt standing at Sh5.04 trillion in June 2018, Sh4.41 trillion in June 2017, Sh3.62 trillion in June 2016, Sh2.83 trillion in June 2015, Sh2.37 trillion in June 2014, and Sh1.89 trillion in June 2013.
According to Mukhisa Kituyi, the United Nations Conference on Trade and Development secretary-general, Kenya's debt trajectory is unsustainable. "In absolute terms, Kenya's debt is sustainable, but the trajectory of expanding public debt is unsustainable. Even as a percentage of GDP, we have seen greater acceleration over the past five to 10 years," he said in a forum in Nairobi last week.
