Public debt now hits new high of Sh6.3trn

The total public debt has hit Sh6.3 trillion as both domestic and external liabilities rose.

The most updated figures on domestic debt show that it stood at Sh3.043 trillion as of March 13, the highest level it has reached, while external debt substantially exceeded Sh3 trillion after depreciation of the local currency in the recent past.

Domestic debt escalated from Sh2.9 trillion at the end of last year, hitting Sh3 trillion for the first time in January before rising further in the past two months. Latest available figure for external debt is $30.66 billion or Sh3.27 trillion with the local unit at 106.7 to the dollar – one of the lowest rates this week.

The proportion of short-term debt, however, increased to 30.93 percent as at March 13, which is the date for the latest data, with the total amount outstanding at Sh925.5 billion.

That of long-term debt stood at 69.07 percent or a total of Sh2.067 trillion. The proportion is nevertheless below the Treasury’s desire to have a higher proportion – preferably 80 percent and above – as compared to the short-term debt.

The overdraft – which the Treasury uses to settle urgent cash requirements – was down in the week to March 13 standing at Sh25.79 billion compared to the level of Sh30.47 billion at the end of February and even a higher Sh59.19 billion at the end of January, signalling that the exchequer emergency cash needs have lessened.

Banking institutions continued to hold the bulk of the debt stock at 54.4 percent followed by pension funds at 28.8 percent, insurance companies with 6.25 per cent, parastatals with 6.2 per cent and other investors with 4.34 percent.

The share of external debt is, however, likely to rise further if the World Bank and the International Fund disburse Sh122.5 billion or $1.15 billion that Kenya has sought from the two multilateral lenders to cope with the adverse economic effects of the Covid-19.