This archive report was first published on 5 June 2020.
Kenya's debt has reached a staggering Sh6.28 trillion, a 15 percent increase from the same period last year, according to documents tabled before Parliament on March 31, 2020.
The sharp rise in debt is attributed to external loan disbursements and the uptake of domestic debt during the period, Treasury Secretary Ukur Yatani said in the report.
Of the total debt, foreign loans account for 51.1 percent, valued at Sh3.21 trillion, while domestic loans, which attract lower interest rates, stand at Sh3.07 trillion.
The Jubilee administration signed 13 loan deals in the period, occasioning the Sh864.4 billion rise in total public debt from Sh5.42 trillion as at March last year.
Some of the projects to be funded by the loans include the construction of the Thwake Dam, the expansion of the Nairobi water and sanitation project, and the bridge linking Mombasa Island to mainland Mombasa.
Kenya borrowed Sh47.7 billion from Japan International Corporation Agency (JICA) to fund the construction of the gate bridge linking Mombasa Island to Mombasa mainland, Sh22.3 billion from the African Development Bank to fund the construction of the Thwake dam in Makueni, and Sh11.6 billion from the French development agency, Agence Française de développement (AFD), to finance the Nairobi water and sanitation project.
Additionally, Kenya borrowed Sh107 billion from the World Bank and Sh78.4 billion from the IMF to plug budget deficits and cushion the economy from the fallout caused by the Covid-19 pandemic.
Official data shows that Kenya needs to pay Sh441 billion in interest on loans in the year ending June 2020, an amount that will rise to Sh475.9 billion in the 2020/21 period and Sh483 billion by 2021/22.
The IMF has warned that the country risks sliding into debt distress due to borrowing, with the debt ratio rising to 57 percent of Gross Domestic Product (GDP), the highest in the East African Community except Burundi.
