Kenya’s debt burden has crossed Ksh11 trillion, pushing the country to the edge of a financial storm. Now, Transport Cabinet Secretary Davis Chirchir is under fire for a controversial Ksh175 billion infrastructure bond deal. He insists it is not public debt. Lawmakers and financial experts disagree. They fear the scheme could hide billions off the books while leaving taxpayers exposed. The arrangement has left Kenyans asking if the government is sneaking in more loans through the back door. Chirchir’s dubious Ksh175B loan defense hides real dangers, raising fears of concealed debt while Kenya’s fragile economy staggers under unsustainable liabilities and a soaring debt-to-GDP ratio. [Photo: Courtesy] How Chirchir's Dubious Loan Exposed Kenya to Hidden Debt On Friday, September 5, Chirchir appeared before the National Assembly’s Budget and Appropriations Committee. MPs grilled him over the Ksh175 billion facility arranged with the Trade and Development Bank.
Chirchir defended the deal by arguing it was not a loan but a financing arrangement. He explained that Ksh7 from the Road Maintenance Levy Fund (RMLF) had been diverted to a Special Purpose Vehicle (SPV). According to him, the SPV would borrow against future revenues, making it “bankruptcy-remote” from government accounts.
By keeping the transaction off the government’s books, Chirchir claimed the country’s debt ceilings would remain untouched. He assured MPs that no sovereign guarantee had been issued and that risks were carried by the SPV, not the Treasury.
Yet, critics say the setup is deliberately opaque. If the SPV defaults, Kenyans fear taxpayers will eventually shoulder the bill. Economists warn that this shadow borrowing only masks the true size of Kenya’s debt. Kenya’s Debt Already Beyond Safe Levels Kenya’s official public debt has already surpassed Ksh11 trillion. Of this, Ksh5 trillion is domestic while another Ksh5.09 trillion comes from external creditors. Treasury Bills and Bonds dominate domestic debt, while external loans flow from multilateral, bilateral, and commercial partners.
At 63 percent of GDP, Kenya’s debt is well above the legal limit of 55 percent. Servicing this debt already consumes half of all tax revenue. Adding new off-book obligations could trap the country in a debt spiral similar to other African nations caught in opaque loan schemes.
The Ksh175 billion facility is meant to cover pending bills at the State Department for Roads. Chirchir also confirmed a large share would fund the Nairobi-Nakuru-Mau Summit Highway project. This road has long been marred by controversy and delays. Critics now question why a disputed project is being financed through such a secretive arrangement. The Highway Project and Questions of Priorities The Nairobi-Nakuru-Mau Summit road is part of the Northern Corridor, a vital trade route linking Kenya to Uganda, Rwanda, Burundi, South Sudan, and the eastern Democratic Republic of Congo. Congestion on the road is a real problem. But the financing strategy raises red flags.
The project, scheduled for completion by June 2027, will cost billions. With 24 months of heavy construction ahead, experts warn costs could balloon beyond projections. The question remains: why rush into a risky financing deal instead of transparent parliamentary approval?
Kenyans worry the SPV model allows powerful individual s to profit while leaving taxpayers vulnerable. If revenues from the RMLF fail to cover repayments, the government may be forced to step in. That would quietly turn the bond into public debt, despite Chirchir’s assurances. Final Word Chirchir’s defense of the Ksh175 billion deal exposes Kenya’s fragile financial position. Labeling the money “not public debt” does not erase the risk. Instead, it raises suspicion that the government is concealing its borrowing spree. With the debt-to-GDP ratio already beyond safe limits, the country cannot afford hidden liabilities.
Kenyans deserve full transparency. Unless Parliament forces accountability, the Chirchir dubious loan could become another costly burden for generations to come.