- Latest Central Bank of Kenya (CBK) data shows the debt climbed to Sh7.71 trillion end of June from Sh7.28 trillion as of December last year.
- In June, the government received Sh80.9 billion ($750 million) from the World Bank and raised Sh107.9 billion ($1 billion) from a Eurobond offer for budgetary support.
Kenya’s outstanding public debt increased by Sh432 billion in the six months to June after State raised borrowing from international institutions for budgetary support and aid in the fight against the Covid-19 pandemic.
Latest Central Bank of Kenya (CBK) data shows the debt climbed to Sh7.71 trillion end of June from Sh7.28 trillion as of December last year.
In June, the government received Sh80.9 billion ($750 million) from the World Bank and raised Sh107.9 billion ($1 billion) from a Eurobond offer for budgetary support.
The International Monetary Fund (IMF) also approved a Sh44.2 billion ($410 million) disbursement, following the release of another $314 million (Sh34.45 billion) in April.
The CBK data show external debt accounted for 52 percent of total debt — at Sh4.01 trillion.
Over the six months, domestic debt, which is largely in form of Treasury bonds and bills, rose by Sh209.18 billion to Sh3.70 trillion. The ballooning borrowing underlines the increasing budget deficit, which has also led to higher taxation for workers and businesses.
Total debt service will hit Sh1.17 trillion in the financial year that started on July 1, representing a 30 percent jump from the costs for the year ended June 30. This consists of redemptions of up to Sh346.81 billion and Sh262.09 billion for domestic and external debt respectively, while interest to be paid amounts to Sh421.90 billion and Sh138.36 billion respectively.
On the other hand, the tax revenue collections are projected at Sh1.78 trillion for the 2021/22 fiscal year.
Kenya has, however, received an extended debt repayment moratorium from rich countries that will see it save Sh39 billion ($361 million) and ease the costs in the six months to December.
The IMF and World Bank have, however, expressed concerns over Kenya’s rising deficit and appetite for borrowing to finance state expenditure, citing defaults in repayment.
The net external borrowing is estimated at Sh291.3 billion this year, while net domestic borrowing of Sh661.9 billion and could see the total debt jump to Sh8.59 trillion in the year ending June 2022.