Kenya’s public debt has hit Ksh7.71 trillion from Ksh7.28 trillion in December 2020 according to official data from the Central Bank of Kenya (CBK).
For the first time in history, the government is set to hit the Ksh1 trillion mark in borrowing, with this year’s debt projected to hit Ksh1.169 trillion.
“Kenya’s public and publicly guaranteed debt stood at Ksh7.7 trillion by the end of June 2021. This comprised Ksh3.69 trillion domestic debt (47.9 percent) and Ksh4.01 trillion external debt,” said CBK.
The Ksh1.169 trillion encompasses the 38-month loan agreement between the government and the International Monetary Fund (IMF) worth Kshh257 billion.
The loan agreement, in which Kenya has already received Ksh78 billion, was signed in April through the Extended Credit Facility (ECF) and Extended Fund Facility (EFF). In April, Kenya received Ksh34.45 billion as part of the loan and Ksh44 billion in May.
In June, the government raised Ksh107.9 billion from a Eurobond offer and another Ksh80.9 billion from the World Bank.
Worse still, a big chunk of the borrowed money will be used to service debts on recurrent expenditures, which take up a third of the budget. This year’s budget for the country has hit a historic high of Ksh3.65 trillion against a projected revenue collection of Ksh2 trillion.
State-Owned Enterprises (SOEs) have a combined debt of Ksh171 billion while ministerial overdrafts amount to Ksh47 billion.
Public debt could reach an all-time high of Ksh8.59 trillion by June 2022, even as the government plans to borrow an additional Ksh930 billion over the next 12 months.
Currently, the public debt ceiling has been set at Ksh9 trillion, and the government is petitioning Parliament to raise the ceiling for more borrowing.