Ruto increases Kenya’s debt by Ksh Sh1.56 trillion in a single year
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Kenya's gross debt stock increased by Ksh Sh1.56 trillion since President William Ruto assumed office
Kenya’s gross debt stock increased by Ksh Sh1.56 trillion since President William Ruto assumed office.
During President William Ruto’s first year in office, Kenya borrowed the largest amount of money in a single year, pushing the country’s debt levels above the breaking point due to decreased tax revenue and increasing repayment commitments.
According to recent figures issued by the Treasury, the gross debt stock increased by Sh1.56 trillion for the fiscal year that ended in June, surpassing the Sh10 trillion threshold by Sh189.53 billion.
Kenya’s gross overall debt load at the end of fiscal year, which concluded in June, was Sh10.19 trillion, up 18.08 percent from Sh8.63 trillion in the previous full fiscal year under former President Uhuru Kenyatta.
The numerical debt cap was changed by lawmakers in June to an anchor of 55 percent of gross domestic product (GDP), with the Treasury given five years to comply.
The jump in gross debt came in a fiscal year Ruto, who was in charge for nine of the 12 months under review, made it clear his administration would cut borrowing.
Nearly Sh1.43 trillion, or 91.52 percent, of the new gross debt, was contracted in the last nine months of the year under review, according to the Treasury data.
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Ruto had pledged not to make the nation “slaves of debt from any place or any country”.
Foreign borrowing accounted for two-thirds of the jump in gross debt after Kenya contracted an additional Sh1.06 trillion from foreign creditors to stand at Sh5.36 trillion.
Multilateral lenders — largely the World Bank Group, the International Monetary Fund (IMF), and African Development Bank (AfDB) — grew their credit to Kenya by Sh728.85 billion, or 37.89 percent year-on-year, zooming past the Sh2.65 trillion mark.
Loans from multilateral lenders such as the World Bank and AfDB come on concessional terms, which average a 1.75 percent fixed interest rate, with a 35-year tenor and a grace period of up to 10 years.
The stock of debt taken from foreign commercial banks and rich countries increased by Sh166.09 billion and Sh159.83 billion in the review period, partly reflecting the impact of a weaker shilling, to close at Sh1.36 trillion and Sh1.33 trillion.
Borrowings sourced from domestic sources such as commercial banks, pension funds, and insurers through the sale of Treasury bonds and bills increased Sh503.01 billion to end June 2023 at Sh4.83 trillion.
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