Concerns as Kenya’s public debt hits a record Ksh10.5 trillion as RUTO borrows another Sh303.2 billion despite uproar

Monday, October 7, 2024 - Kenya’s debt burden has surged to an unprecedented Ksh10.5 trillion after President William Ruto’s administration took on new loans amounting to Ksh303.2 billion in the year ending June 2024.

The national debt, which increased by Ksh303.2 billion within three months, highlights the government’s ongoing reliance on external financing to sustain key projects.

The spike in borrowing raises concern, especially as the country braces for a projected debt of Ksh13.11 trillion by 2028.

According to reports, the loans were sourced from both multilateral and bilateral lenders to finance projects in crucial sectors like health, energy, and MSMEs.

These loans, though necessary for development, further burden a debt stock already nearing unsustainable levels.

The report shows that external debt accounts for 48.9 per cent of the total debt, standing at Ksh5.171.7 billion, while domestic debt contributes the remaining Ksh5.410.3 billion.

While the debt-to-GDP ratio saw a marginal decline to 65.7 per cent from 72 per cent, this was largely attributed to the appreciation of the Kenya shilling against major foreign currencies, a temporary reprieve in a looming fiscal crisis.

This comes as Ruto warned that borrowing would be necessary to keep the government running after the withdrawal of the Finance Bill 2024 as a result of protests led by the Gen Zs.

With the debt projected to hit Ksh13.11 trillion by the 2027/2028 financial year, concerns over Kenya’s fiscal health continue to mount.

Ruto faces an uphill battle in balancing necessary development with managing its rising debt obligations.

The Kenyan DAILY POST