President William Ruto has affirmed his stance to reduce borrowing despite financial difficulties facing the country.
During an engagement on Saturday, July 20, the Head of State noted that the country could no longer depend on loans to grow itself.
He expressed that many people were suggesting for the government to continue borrowing, further reiterating that he had to make the right decision for the country.
Ruto revealed that Kenya was currently paying Ksh1.1 trillion in loan interest, which he cited as a worrying trend.
"I get into a lot of trouble when making big decisions. That is why we cannot continue to borrow. Today we pay Ksh1.1 trillion for interest and that is not even for principal.
"There are people who say that we should continue to borrow. I can't. Let them continue calling me Zakayo," he stated.
The Head of State added that Kenyans would see the benefits of his unpopular decisions in due course.
"When history is written one day, it will vindicate those who make the right decisions," he asserted.
Kenya's outstanding debt has been a concern for many Kenyans. This was also one of the concerns raised during the ongoing protests. As of March 31, Kenya's outstanding debt stood at Ksh10.39 trillion.
Most of the debt is owed to commercial lenders as domestic debt stands at Ksh5.235 trillion. On the other hand, Ksh5.163 trillion is owed to external lenders.
Notably, the external debt portfolio reduced by Ksh490 billion within the first quarter of 2024. This was occasioned by the strengthening of the shilling against the dollar.
"Debt owed to bilateral creditors decreased by Ksh116.49 billion and multilateral debt by Ksh244.60 billion. Commercial debt decreased by Ksh118.80 while publicly guaranteed external debt decreased by Ksh10.58 billion," read the report in part.
Loan Audit
Following the protests that were witnessed in the country in recent weeks, Ruto appointed a team to audit the outstanding debt.
Ruto tasked the team led by Former IMF Director of Internal Audit, Nancy Onyango, to establish the authentic debt standing of Kenya while at the same time interrogating how the borrowed money was used.
"In the light of the current debt burden, the imperative for fiscal consolidation and the constrained fiscal space, recommend alternative sources of financing the country's development needs in the short and medium term and any debt reorganisation plan," read the gazette notice in part.
The team is expected to report back in three months.