Dr. Margaret Nyakang’o, Controller of Budget, has expressed worries about the government’s continuous borrowing.
Nyakang’o claims that it has increased state debt beyond the permitted debt ceiling of 55% of GDP, with the current debt level being at 67% of GDP.
In the National Government Budget Implementation Review Report for the first quarter of the fiscal year 2024/2025, which ran from July 1 to September 30, Nyakango revealed the country’s mounting debt burden.
She disclosed that about seven out of every ten shillings received by the taxman is spent on debt servicing, with payments made first before any other spending.According to the report, as of September 30, 2024, the public debt stock stood at Ksh.10.79 trillion, accounting for 67% of GDP, with Ksh.
5.19 trillion in external debt (48% of total debt) and Ksh.5.6 trillion in domestic debt (52% of total debt).
The study also stated that Kenya’s governmental debt climbed by 2%, from Ksh.10.58 trillion on June 30, 2024, to Ksh.10.79 trillion on September 30, 2024.
It also stated that Kenya’s GDP was Ksh.16 trillion as of June 30, 2024, with an increase in domestic borrowing.
Nyakang’o also stated that Kenya’s governmental debt exceeds the allowed maximum of 55% of GDP by 12%.
In June of last year, Parliament approved the National Treasury’s proposal to have public debt at 55% of GDP by converting the Ksh. 10 trillion debt cap to a debt anchor as a percentage 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 also stated that the government must minimize waste and corruption in order to break the continuous 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 ordered the state to give details of all debt arrangements executed on Kenya’s behalf, information on sovereign bonds, and a breakdown of borrowing expenses within 45 days.
This comes amid concerns over Kenya’s odious debt, which cannot be connected to specific projects.
Although President William Ruto promised to lessen the debt burden, there has been a steady growth in borrowing since his ascent somewhat more than two years ago.
