Kenya: Kenya Trapped in Borrowing Cycle As Debt Hits Billions of Dollars - Controller of Budget

What the report says

AllAfrica, distributing a Capital FM report from Nairobi, said Kenya’s Controller of Budget Margaret Nyakang’o told Parliament that public debt has reached Sh12.82 trillion and that repayments now take up 71% of government revenue. Appearing before the National Assembly’s Public Petitions Committee on Tuesday, she said the burden leaves limited room for salaries, services and development spending.

According to the report, Nyakang’o described Kenya as caught in a borrowing cycle because current fiscal pressures make it difficult to stop taking on new loans immediately. She said the debt stock is about 60% domestic and 40% external, and urged a gradual approach focused on raising revenue and reducing expenditure so the financing gap narrows over time.

The Controller of Budget also told MPs her office had asked the National Treasury to explain spending on IMF on-lent loans after identifying expenditure above amounts approved by Parliament. She said the Treasury had submitted further requisitions for spending that was not provided for in the budget, and her office was awaiting a response.

The report added that none of Kenya’s 47 county budgets had passed the Controller of Budget’s legal compliance test as of July 28, despite county assembly approvals. Nyakang’o said the Central Bank of Kenya and the National Treasury are working on a system to pay verified suppliers directly after her office approves funds, a measure intended to limit diversion of public money. The warnings matter because debt servicing at the reported level could further restrict Kenya’s ability to fund public services and development priorities.