Former director-general in charge of public debt management at the Treasury Haron Sirima has made a comeback to public service as a senior adviser of President William Ruto, just four months after his exit amid a fallout over credit sustainability concerns.
The appointment of the career banker, which took effect on November 1, 2024, runs for an initial period of three years.
“I’m pleased to convey the decision of the Public Service Commission (PSC) of Kenya that you be offered appointment in the post of Senior Advisor, Debt Management on Local Agreement terms of service for an initial period of three (3) years in the Executive Office of the President with effect from 1st November 2024 during the tenure of His Excellency the President,” the Head of Public Service, Felix Koskei, said in a letter dated October 23, 2024.
Treasury Principal Secretary Chris Kiptoo said the exchequer expects to tap Dr Sirima’s expertise in designing and executing appropriate debt management strategies to ensure public debt remains within sustainable levels.
“Dr Sirima has rejoined the public service as Senior Advisor, Public Debt Management at the Executive Office of the President,” the PS told Business Daily on Tuesday.
“In this role, The National Treasury will tap his expertise in this highly specialised field of public finance to assist in the design and execution of appropriate strategies to ensure public debt remains within sustainable levels.”
Dr Sirima officially left the Treasury in early July last year and was replaced by Raphael Owino as the new boss at the debt management office.
Mr Owino, an economist formerly based at the Central Bank of Kenya, took the role at a time when the Kenyan Kwanza administration was grappling with falling domestic revenue collections, rising expenditure pressures, mounting debts, and increased debt servicing costs.
Kenya’s public finances were in focus early last year because of concerns it could default on a $2 billion (Sh258.55 billion at current exchange rates) international bond, and more recently because of violent protests that forced President William Ruto to withdraw planned tax hikes.
The Treasury bought back most of the $2 billion bond in February last year by issuing a new $1.5 billion (Sh193.91 billion) bond before paying off the rest ($500 million or Sh64.64 billion) in June.
Concerns about Kenya’s ability to repay the 2024 Eurobonds were evidenced by the negative credit ratings the country received from global rating agencies coupled amid fiscal constraints and macroeconomic instability that continued to hurt the country’s creditworthiness.
Kenya’s total public debt stock increased by Sh303.2 billion to Sh10.58 trillion in the 2023/2024 financial year from Sh10.27 trillion in the 2022/2023 financial year, comprising Sh5.17 trillion and Sh5.41 trillion in external debt and domestic debt respectively.
The Treasury says the external debt is deemed sustainable in the medium term but carries a high risk of distress.
During his tenure at the Treasury Dr Sirima had been tasked with reducing the cost of borrowing and the cost of public debt management.
His office was also in charge of promoting the development of the market institutions for government debt securities.
Dr Sirima was appointed director-general of the Treasury’s Public Debt Management Office in June 2018 by the then Jubilee administration.
Before that, he had served as a deputy governor at the CBK for four years between 2011 and 2015.
He joined the CBK as a graduate trainee in 1986 and rose through the ranks to the position of deputy governor in 2011.
The public debt office is critical in handling the country’s public debt, including supervising the servicing of loans which has emerged as a top risk for the country.
Kenya is expected to pay Sh1.85 trillion in principal and interest.
Dr Sirma joins a battery of other high-profile advisers to President Ruto stationed at the State House, including David Ndii, Henry Rotich, Monica Juma, Adan Mohamed, Augustine Cheruiyot, and Ali Mohamed.
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