Controller of Budget, Dr. Margaret Nyakang’o, has raised concerns over the government’s continued borrowing, which has pushed public debt above the approved debt ceiling of 55% of Gross Domestic Product (GDP), with the current debt level standing at 67% of GDP.
In the National Government Budget Implementation Review Report for the first quarter of the 2024/2025 financial year, covering the period from July 1 to September 30, Nyakango laid bare the country’s growing debt burden.
She revealed that approximately 7 out of every 10 shillings collected by the taxman go towards debt servicing, with payments made as a first priority before any other expenditure.
In the report, the COB states that, as at September 30, 2024, public debt stock stood at Ksh.10.79 trillion, which is 67% of the GDP, comprising Ksh. 5.19 trillion as external debt (48% of the total debt) and Ksh.5.6 trillion due to domestic debt (52% of the total debt).
The report also highlighted that Kenya’s public debt increased by 2% from Ksh.10.58 trillion, as of June 30, 2024, to Ksh.10.79 trillion as of September 30, 2024. It also revealed that Kenya’s GDP stood at Ksh.16 trillion as of June 30, 2024 and that there’s been an increase in domestic borrowing.
Nyakang’o similarly highlighted that Kenya’s public debt had exceeded the approved ceiling of 55% of GDP by 12%.
Parliament had, in June last year, converted the Ksh. 10 trillion debt ceiling with a debt anchor as a percentage of GDP, approving the National Treasury’s proposal to have public debt at 55% of GDP.
“I do not see this going down. The debt will still continue rising with time if we do not take necessary measures,” said Nyakang’o.
She added that the government needs to reduce wastage and corruption to curb the vicious cycle of borrowing.
“E-Citizen has been effective in reducing wastage. We need to stop buying expensive vehicles for the government,” she said.
The development comes 11 days after High Court Judge Lawrence Mugambi, on Friday, ordered the state to provide, within 45 days, details of all debt agreements made on behalf of Kenya, information on sovereign bonds, and a breakdown of expenditure of all borrowed funds.
This comes on the backdrop of concerns over Kenya’s odious debt, which cannot be linked to specific projects.
Although President William Ruto had promised to reduce the debt burden, there has been a steady increase and more borrowing since his ascension slightly over two years ago.
