Public debt repayment costs hit a record Sh347.2bn for July to September, according to exchequer statistics published by Treasury Cabinet Secretary Njuguna Ndung’u last Friday.
An equivalent of two-thirds of tax revenues go towards servicing the ever-growing public debt.
Make no mistake. In Kenya, debt obligations are fast-rising this financial year ending June 2024 largely due to the maturing semi-concessional and commercial borrowing taken by President Uhuru Kenyatta administration on building roads
Eurobond offerings, a package of Chinese loans and syndicated commercial loans over the years have conspired to make debt servicing higher than costs for running government
That means that of the Sh3.6trn (with huge deficits), government has now budgeted for Sh1.75trn on public debt for FY2023/4. This is a high from last year’s debt repayment budget of Sh1.16trn in the year ended last June.
“The debt sustainability analysis shows that Kenya’s public debt remains sustainable as a medium performer in terms of debt carrying capacity. However, there is a high risk of debt distress as a result of global shocks leading to a slowdown of economic growth,” Treasury officials wrote in the draft 2023 Budget Review and Outlook Paper last month.