Kenya’s total public debt has hit the 6 trillion mark, growing steadily by 14% from KSh 5.3 trillion at the beginning of the year. A massive chunk of the country’s borrowing originates from its external debt, which stood at KSh 3.16 trillion at the end of August. Kenya’s debt continues to be a growing concern, given the country is looking to fund significant development projects such as the Mombasa-Nairobi expressway soon.
External debt seems to satisfy a significant portion of the government’s insatiable credit appetite. In the past one year, external public debt grew by 20% from KSh 2.6 trillion to KSh 3.13 trillion. On the other hand, domestic debt grew to KSh 2.8 trillion, a 13 % growth from KSh 2.5 trillion in September last year.
Hitting the 6 trillion mark sounds a wake-up call to the country’s borrowing habits, given that the debt represents 60% of our GDP. Moreover, recent regulations that point to repealing the interest rate would increase the cost of domestic debt. Besides, raising the new 9 trillion debt without reference to economic growth leaves room to avoid fiscal responsibility. Collectively, the public debt and its related policy make it even less likely for Kenya to become a KSh 10 trillion economy as IMF earlier predicted.