The burden of external debt incurred by successive administrations is threatening to cripple Kenya’s economy and taint President William Ruto’s development agenda.
In a report released by the Office of the Controller of Budget (CoB), it was revealed that Ruto will use Ksh521 billion to repay external debts during his first term in office.
Should he win a second term, President Ruto will further need to fork out an extra Ksh4 trillion to pay syndicated and concessional loans as well as other external debts.
This is in addition to a Ksh1 trillion domestic debt maturing over the same period.
In 2024, the Kenya Kwanza administration will pay Ksh316 billion to finance external debt.
This amount will primarily go towards paying Eurobond acquired in 2014 and maturing in June 2024. The amount is bound to rise further should the Shilling continue depreciating.
Ruto’s administration will have a momentary relief in 2025 with only Ksh11 billion in external debt maturing in that period.
In 2026 and 2027, Kenya will service external debts of Ksh55 billion and Ksh512 billion respectively.
The bulk of Kenya’s foreign debt repayment will be between 2027 and 2032 where most of the revenue collected will go towards paying Ksh4.7 trillion debt maturing during that period.
Already, the country is struggling to meet its international financial obligations regarding repaying loans.
According to CoB the allocation towards servicing the public debt in Financial Year 2023/24 amounted to Ksh1.75 trillion.
“Allocation towards external debt amounts to Ksh748 billion, comprising Ksh540 billion for redemption and Ksh207 billion for interest payments, while domestic debt amounts to Ksh1 trillion, comprising Ksh374 billion for redemption and Ksh628 billion for interest payments,” a report from CoB indicated on Kenya’s debt repayment status for FY 2023/24.
