Margaret Nyakang'o, the Controller of Budget (CoB), has issued several recommendations to the National Treasury aimed at streamlining debt repayment and revenue collection.
Speaking while appearing before the National Assembly Liaison Committee on Monday, 3 March 2025, Nyakang'o noted that better strategies needed to be implemented to ensure Kenya’s fiscal sustainability and economic resilience.
At the top of her list of measures was a consistent review of Kenya’s debt portfolio, in which she emphasised a preference for concessional loans with lower interest rates and favourable repayment terms over expensive commercial borrowing.
She further recommended the implementation of comprehensive audits of debt procurement, utilisation, and sustainability.
The third major measure she recommended to the National Treasury was to avoid premature debt commitments by ensuring that projects are fully prepared for implementation before contracting loans.
Speaking on the Medium-Term Debt Management Strategy (MTDS), she expressed concerns over the reduction of the grace period for debt repayment from 4.8 years to 4.4 years, indicating an increase in the interest rate.
She further urged the National Treasury to adopt better strategies that would slash Kenya's Gross Domestic Product (GDP) debt ratio to 55 per cent by 2029. This is especially attainable as Kenya's total nominal public debt has been declining from 71.9 per cent in 2022 to 65.7 per cent in June 2024, according to her report.
"The total nominal public debt as a percentage of GDP in Kenya has been declining, decreasing from 71.9% in 2022 to 65.7% in June 2024. As per the 2025 Budget Policy Statement, this ratio will decrease to 52.5% in 2029," part of the report read.
"The debt-to-GDP ratio is notably higher than the International Monetary Fund's recommended threshold of 50% for developing countries."
During her appearance before the Liaison Committee, Nyakang'o also dropped a bombshell, revealing that several monthly remittances were operated outside the Consolidated Fund, meaning she had no control over them, contrary to popular belief.
“There is a lot of money that does not pass through the Controller of Budget, and the Housing Fund, the SHIF, the Railway Development Fund, and the Petroleum Levy are operated outside the Consolidated Fund, and therefore not part of what I approve,” Nyakang’o noted.
“These funds are also covered in the law, but it doesn't have to be like that always. If these funds are to be transferred to my office, Parliament should assess and review the Act, and see the exit clauses in terms of how this can be effected."
