President William Ruto’s administration is reeling under a huge public debt burden, with loans maturing at a rate of Sh50 billion every week.
The situation is compounded by a revenue collection shortfall that has further pushed the government to the brink.
The resultant cash crunch has occasioned delays in the payment of civil servants’ salaries and disbursement of equitable share of national revenue to the 47 county governments.
Appearing before the Senate County Public Investment and Special Funds committee, National Treasury and Economic Planning Cabinet Secretary Njuguna Ndung’u said in March alone, the total maturities hit Sh147 billion.
Prof Ndung’u told the committee led by Vihiga Senator Godfrey Osotsi that the debt obligations for the month of March were largely driven by interest payments to domestic creditors. The CS explained that most of the debts falling due at the same time are domestic.
He added that the government has to service these domestic debts to stimulate the local economy.
He said the economy is facing what he termed a perfect storm, with missed growth targets worsening revenue shortfalls and the prevailing tough times.
The Treasury boss further explained that public investments, which are the key drivers of growth, have slowed down.
Data from the Treasury shows that the debt-servicing budget is Sh1.36 trillion, down from the Sh1.39 trillion budget that had been set aside for servicing debts by former President Uhuru Kenyatta’s administration.
