Kenya spent Sh150 billion to repay public debt in the month of March alone
Kenya spent Sh150 billion to repay public debt in the month of March alone amidst a shortfall in revenue collection
Kenya spent Sh150 billion to repay public debt in the month of March alone amidst a shortfall in revenue collection.
According to information provided to MPs on Thursday, Kenya spent Sh150 billion in March alone to pay off its public debt, underscoring the rising difficulty of servicing the nation’s debt load while suffering from a revenue shortfall.
This came against the backdrop of Treasury Principal Secretary Chris Kiptoo’s disclosure that the country has a KSh67 billion revenue shortage as of Wednesday.
Dr. Kiptoo informed the Senate that the Treasury is having difficulty obtaining monies for disbursement to counties as well as to ministries, departments, and agencies (MDAs).
“This month of March alone, we have paid Sh150 billion in debt repayment. This is the highest component of our revenue,” Dr. Kiptoo told Senators.
Dr. Kiptoo told the Senate County Public Investments and Special Funds Committee that public debt repayment and statutory payments such as pension form the first charge on the Consolidated Fund.
“We have prioritized payment of public debt and pension. We have already settled all debt that was due and we are moving systematically to sort out the remaining payments and disbursements to national and county governments,” Kiptoo said.
“Payment of our public debt obligation is important for our international and national posture,” he said.
Kenya’s public debt has in the last 10 years been growing very fast as the government of former President Uhuru Kenyatta took up loans to build mega infrastructural projects such as the standard gauge railway, which gobbled up slightly over Sh600 billion.
The government has also incurred billions of shillings to construct roads, set up energy projects, and expand sea and airports, a situation that has pushed up the country’s debt level to Sh9.145 trillion.
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Growth of debt, especially commercial loans such as the Eurobonds, has resulted in a spike in debt service costs, with billions of shillings in taxes going to interest payments at the expense of critical public services.
Appearing before the Senate committee, Dr. Kiptoo revealed that the Treasury has delayed the release of Sh88 billion in development budget for the national government due to a shortfall in revenues.
“From July 1, 2022, to now, ministries and departments have not received a coin of their development budget which is usually about Sh200 billion annually,” he told the committee chaired by Vihiga Senator Godfrey Osotsi.
“We are lagging behind with MDAs and counties. We are working very hard to raise revenues through tax administration and tax compliance.”
“We are also expecting an IMF program called Resilience and Sustainability Facility that will support climate change,” Dr. Kiptoo told lawmakers.
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