National Treasury Principal Secretary Chris Kiptoo revealed that the government on Monday made a Ksh152 billion payment towards settling part of Kenya’s domestic debt.
While appearing for an interview at Spice FM on Tuesday, February 26, Kiptoo added the payment came days after Kenya paid Ksh220 billion towards settling part of Eurobond acquired in 2014.
According to Kiptoo, the government relies on revenue collected to settle domestic and foreign debts.
“We endeavour all the time to honour our obligations. Just this Monday, we had to pay Ksh152 billion debt obligations for domestic debt,” he explained.
While providing a breakdown of the funds, he stated that Ksh107 billion went towards settling principal payments with the rest offset interest accrued.
“We do that every Monday because that is the day that we settle our domestic debt obligations,” PS Kiptoo explained how the debt was a huge burden for President William Ruto’s administration.
Kiptoo assured the nation that the government was critical of the consequences of defaulting and thus was obligated to clear its debts.
However, overdependence on loans by the previous governments made it difficult for Ruto's administration to allocate money for development.
“For every money we receive from Kenya Revenue Authority, 60 per cent goes to honouring debt obligations,” he explained.
The paltry balance is spread across meeting recurrent expenditures, paying counties and facilitating development projects.
On Thursday, January 11, Ruto disclosed that for every Ksh10 collected by the government, Ksh7 was for repaying foreign and domestic debt.
According to the Central Bank of Kenya Weekly Bulletin Kenya's gross domestic debt amounted to Ksh5.05 trillion as of February 16, 2024.
Treasury Bonds account for Ksh4.3 trillion of the total debt with Treasury Bills standing at Ksh556 billion.
Other constituents of the domestic debt include; overdrafts at the Central Bank (Ksh94 billion), International Monetary Fund (IMF) funds on-lent to the Government (Ksh104 Billion), and other domestic debts (Ksh136 billion).
