Kenya’s debt rises by 15 percent to Sh6.28 trillion
Elvis Onchwari  |  Jun 5, 2020


p>In the three months to March, documents tabled before Parliament show that Kenya’s debt rose by 15 percent and now stands at sh6.28 trillion.

The quarterly economic and budgetary report shows that the Jubilee administration signed 13 loan deals in the period occasioning the Sh864.4 billion rise in total public debt from Sh5.42 trillion as of March last year.

The report shows that eight of the loans were signed with bilateral lenders while five were from multilateral lenders as the government increased its borrowing to fund development.

Foreign loans account for 51.1 percent of the total debt or Sh3.21 trillion while the value of the domestic loans that attract lower interest rate stands at Sh3.07 trillion.

The government has borrowed Sh47.7 billion from Japan International Corporation Agency (JICA) to fund construction of the gate bridge linking Mombasa Island to Mombasa mainland and Sh22.3 billion from the African Development Bank to fund construction of the Thwake dam in Makueni.

A further Sh11.6 billion was borrowed from the French development agency, Agence Française de développement (AFD) to finance the Nairobi water and sanitation project.

Last month, Kenya borrowed Sh107 billion ($1 billion) from the World Bank and Sh78.4 billion ($739 million) from the IMF to plug the budget deficit and cushion the economy from the fallout caused by the Covid-19 pandemic, further increasing the country’s debt.

“The increase in public debt is attributed to external loan disbursements and the uptake of domestic debt during the period,” Treasury Secretary Ukur Yatani says in the report.

The sharp rise in debt portfolio is set to exert more pressure on the country’s revenues that are already under-performing due to economic disruptions, job losses, and salary cuts occasioned by the pandemic.