The public debt management report for the financial year 2019-20 has revealed that Kenya's debt is set to increase to Ksh10 trillion by the end of financial year 2023-24 from the current Sh7.1 Trillion.
The report tabled in Parliament by the National Treasury noted that the government has been on a borrowing spree over the past eight months with the debt amounting to Ksh1.1 trillion.
This, the treasury stated, is attributed to the effects of Covid-19 on the economic sector. Another concern raised by the Treasury was the falling government revenues which were accompanied by rising debt servicing costs.
The report projects that Kenya will pay Ksh 1 trillion to pay debts in the 2023-24 financial year compared to the Ksh642 billion in the current financial year.
The report, however, indicates that the debt is within manageable levels.
“Kenya’s debt remains sustainable. The risk of external debt distress has moved from high to moderate due to the impact of the global COVID-19 crisis which worsened existing vulnerabilities,” the National Treasury noted in the report.
The government is also reported to have borrowed Ksh374 billion between July and August which further extended the country's public debt to Ksh 7 trillion by end of August 2020.
A report from Central Bank of Kenya (CBK) indicated that 60% of the amount borrowed from July to August came from the domestic markets hence curbing the need for foreign inclusion. The treasury got Ksh224 billion out of the Ksh374 billion borrowed during the two months.
This, however, did not affect the Ksh3.66 trillion borrowed by the government during the period in review.
The government, on Tuesday, September 8, managed to secure Ksh81 billion funding from the World Bank despite criticism and reports that international partners were concerned about widespread corruption in the country.
The project is expected to improve the movement of people and goods, digital connectivity and access to social services for over 3.2 million people living in the North-Eastern region. The country was issued a 5 year grace period for loans whose maturity period is 30 years.
Treasury CS Ukur Yattani, during the National Assembly leadership retreat at Ole Sereni Hotel, Nairobi in August gave a positive outlook of the country's economy, despite the vast debt accumulated over the years. He expressed optimism that the economy was performing better than expected at 4.6%.
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