SHARE

Kenya’s public debt has crossed the sh5 trillion mark for the first time, shining the light on treasury mandarins and renewing the protracted debate on the country’s ability to carry the load in the long term.

Official statistics show that the latest acceleration in the debt pile up was mainly from external borrowing, which pushed total outstanding foreign debt to sh2.563 trillion as at the end of February. Domestic debt, which is more current having included last month’s data, now stands at sh2.448 trillion, making for a total sh5.011 trillion.

AS the CS treasury Henry Rotich presents a 3.7 trillion budget for 2018/2019 Kenya risks losing investors and its economic gains if the government does not contain the runaway debt burden. The steep rise in debt means a looming increase in debt servicing obligations.

At an astounding Sh4.8 trillion, Kenya’s public debt is an ominous ticking time bomb, whose possible explosion has left Treasury officials constantly on the edge.

The International Monetary Fund officials on Thursday told a parliamentary committee that the country’s excessive borrowing amid huge revenue deficit for the economy is worrying.

IMF, a lender of last resort, has already placed Kenya on its debt-distress watch list, giving Treasury six months to put the country finances in order or deny it a $1.5 billion (Sh151.5 billion) standby credit facility which would not only reduce the country’s buffer against external shocks but would also chip away the country’s creditworthiness.

Kenya recorded a government debt equivalent to 57.10 percent of the country’s Gross Domestic Product in 2017.

In 2016 Kenya public debt was 37,717 million dollars, has increased 4,674 million since 2015.

This amount means that the debt in 2016 reached 53.47% of Kenya GDP, a 1.83 percentage point rise from 2015, when it was 51.64% of GDP.

The position of Kenya, as compared with the rest of the world, has worsened in 2016 in terms of GDP percentage

Loans the country plans to clear include the Sh77 billion eight-year commercial loan from Eastern and South Africa Trade and Development Bank the government borrowed in 2015 to repay other debtors who refused to extend maturity of the syndicated loan.

Other loans include Sh75 billion from the five-year Eurobond issued in 2014 maturing in June 2019 and Sh80.9 billion syndicated loan borrowed in 2016.

China whose loan to Kenya stands at Sh520 billion as at December 2017 is the biggest lender, compared to Japan that has lent the government Sh82.5 billion while the loan from France stands at Sh62.3 billion.

If the current trend continues, a lower fiscal deficit will continue to be a moving target and the country may not achieve the EAC monetary convergence criteria to bring down the fiscal deficit to three per cent

In 2016 Kenya public debt was 37,717 million dollars, has increased 4,674 million since 2015.

This amount means that the debt in 2016 reached 53.47% of Kenya GDP, a 1.83 percentage point rise from 2015, when it was 51.64% of GDP.

KSh77 billion 8 commercial loan from Eastern and South Africa Trade and Development Bank

KSh75 billion from the 5 Years Eurobond issued in 2014 maturing in June 2019

KSh80.9 billion syndicated loan borrowed in 2016.

China loan to Kenya stands at KSh520 billion as at December 2017

Japan has lent the government KSh82.5 billion

France stands at KSh62.3 billion.

SHARE