Treasury data shows public debt increase to Sh3.6trn in June

Kenya’s total public debt hit Sh3.6 trillion in the year to June 2016, a report tabled in Parliament has shown.

The Treasury data presented in Parliament on Tuesday showed that the debt rose by about 27 per cent from the Sh2.8 trillion recorded at the end of June 2015.

The Treasury report projects that the public debt will rise to Sh3.76 trillion in June 2017 and further increase to Sh5.3 trillion in June 2020.

“In nominal terms and as a percentage of gross domestic products, total public debt was 54.8 per cent while domestic debt was 27.5 per cent and external debt accounting for 27.3 per cent by June 2016,” says Treasury secretary Henry Rotich in the Annual Public Debt Management Report for the year ended June 2016.

Domestic and external debt account for 50.3 per cent and 49.7 per cent of the Sh3.61 trillion respectively.

Mr Rotich says the total public debt service payments amounted to Sh251.9 billion in the year under review.

“External and domestic debt service was Sh78.6 billion and Sh172.9 billion respectively as at end of June 2016. The ratio of debt service to revenues reduced to 21.2 per cent in June 2016 from 24.6 per cent by end of June 2015,” the report says.

The Treasury said banks were the largest holders of the total public debt (Sh927.3 billion or 51.1 per cent) while the share held by non-residents and non-bank financial institutions including insurers and pension funds was 43.4 per cent.

“Public and publicly guaranteed external debt stock has continued to rise over the past five years, increasing to 1.79 trillion in June 2016 from Sh1.4 trillion in June 2015, a rise of 26.2 per cent,” says the Treasury Cabinet secretary.

The increase is attributed to disbursements from commercial syndicated loans, multilateral and bilateral creditors as well as foreign exchange rate movements.

The Treasury says the total outstanding government guaranteed debt increased by Sh16.6 billion to Sh60.5 billion by June 2016 from Sh43.9 billion in 2015.

READ: World Bank says Kenya's debt racing to danger zone

The increase was mainly attributed to disbursements of Sh8.2 billion and Sh6.2 billion from Germany and Japan for KenGen and Kenya Ports Authority respectively.

He said the proportion of debt owed to commercial creditors increased to 24.1 per cent in June 2016 from 6.6 per cent in June 2016.

“The increase is attributed to issuance of the international sovereign bond and contracting of syndicated loans,” says Mr Rotich.

The World Bank, IDA, banks and China were the main creditors at 27.4 per cent, 24.1 per cent and 17.4 per cent respectively. AfDB/ADF, Japan, France and IMF were among other major multilateral and bilateral creditors.

Mr Rotich says the external debt is long term and by end of June, more than 63 per cent had maturity longer than 10 years with only 11.4 per cent maturing within four years.