Debt repayments took up nearly Sh635.35 billion in 10 months through April, 2019, highlighting the distorting effect of the government’s borrowing spree.
Fresh Treasury statistics show the cash spent on servicing public debt was three times the expenditure on development projects in the same period.
This is 64.06 percent more than the same period a year ago as the short loans Kenya contracted in recent years matured.
Payments to domestic and foreign creditors were the second single largest expenditure item from the Exchequer after recurrent expenditures such as salaries, allowances and government administrative expenses which gobbled up Sh739.15 billion. The recurrent expenses in the July 2018-April 2019 were Sh22.57 billion higher than the same period last financial year, the data shows.
The cash paid to creditors was Sh132.72 billion, or 26.41 percent more than the cumulative disbursements to the 47 counties (Sh234.29 billion), development projects (Sh215.68 billion) and pension payments (Sh52.65 billion).
As a share of revenue, debt servicing accounted for 54.74 percent of the Sh1.16 trillion total tax collections in the 10-month period — 9.83 percent growth over a year earlier.
Debt repayments have shot up in the current year as semi-concessional and commercial borrowing the Jubilee administration has contracted over the last five years come up for repayment.
The Treasury plans to spend nearly Sh870.62 billion on debt obligations by the end of this financial year in June 2019, meaning additional Sh235.27 billion is falling due in May and June.
That includes Sh93.76 billion towards the debut five-year $750 million (Sh75.83 billion) which matures in June.
Treasury secretary Henry Rotich has said part of the fresh Sh210 billion raised from international capital markets last week will be spent on off-setting maturing debt, including the debut Eurobond, with the remainder channelled to infrastructure projects and Budget support.