Kenya’s national debt skyrocketed to Ksh6.6 trillion in the financial year that ended on June 30, 2020.
According to the latest bulletin issued by the Central Bank of Kenya (CBK), the country’s domestic debt stands at Ksh3.15 trillion while the external debt stands at Ksh3.49 trillion.
As per the Kenya National Bureau of Statistics (KNBS), Kenya had a population of 47,564,296 following the 2019 census. This translates to each citizen owing creditors (both local and foreign) at least Ksh139,705 against a per capita (per person) income of Ksh204,831.
To break it down even further, for every Ksh100 you make, at least Ksh68 belongs to foreign and local creditors.
The global Covid-19 pandemic impacted the Kenyan economy severely, with the Kenyan Revenue Authority (KRA) registering poor revenue collection due to partial lockdowns and depressed economic activities.
During the presentation of the 2020/21 national budget, Treasury CS Ukur Yattani annouced that the country's Ksh2.7 trillion budget would be financed by tax revenue, financial aid, and debt.
Notably, the budget showed a deficit of Ksh823 billion, thus justifying the need to borrow.
The Covid-19 global pandemic is expected to have a large medium-term negative impact on the Kenyan economy.
According to the International Monetary Fund (IMF) the global economic growth could slow to 1.0% in 2020 before rebounding to 6.1% in 2021. To put this estimate into context, Kenya’s economic growth in 2008 was 0.2% as a result of Post-Election Violence (PEV), drought and the global financial crisis.
Countries that form the Organisation of the African, Caribbean and Pacific States (OACPS), led by President Uhuru Kenyatta (who serves as the groups President), identified the growing debt burden among its members as challenges that are aggravating the negative effects of the Covid-19 pandemic.
In an unified message sent on June 3, President Uhuru welcomed various debt relief measures being rolled out by global lenders but called for more interventions including debt cancellation.
President Uhuru inherited a debt of Ksh1.8 trillion when he took over from former President Mwai Kibaki in 2013.
With the latest report indicating that the country is headed towards hitting the Ksh7 trillion debt mark before the end of the president's second term, this will mean that the Jubilee government will have presided over a debt increase of almost 300%.
