Kenya spent Sh41 billion more on debts than its total expenditure on development, an official data shows, highlighting the dangers of high borrowing.
The data published by the Treasury on Friday shows that the country spent Sh435.7 billion to settle debts in the 2016/17 financial year.
By comparison Sh394.2 billion was released to all the national government departments and agencies to finance development projects in the financial year that ended on June 30.
The expenditure on debt is also higher than the Sh284.7 billion that the Treasury released to the 47 counties to cover both their current and development expenditures.
Debt repayment has become the single largest item that the Treasury has to pay for.
The amount spent on debt accounts for 53 per cent of the Sh819.9 billion released to cover all the government’s recurrent expenditures.
With the Kenya Revenue Authority having reported a total collection of Sh1.365 trillion for the 2016/17, it implies that 32 cents out of every shilling collected was spent on servicing debts. The figure is set to rise as most of the new loans mature.
Through the financial year, the Treasury chalked up Sh414 billion loans from the domestic markets while another Sh31 billion came from foreign governments and international organisations.
Treasury data also shows Kenya received commercial loans amounting to Sh186.3 billion.