Kenya's debt hit Sh11.02 trillion in January 2025 - Mbadi

Kenya's debt hit Sh11.02 trillion in January 2025, the National Treasury Cabinet Secretary has revealed.

Mbadi said the debt comprises Sh5.93 trillion in domestic and Sh5.09 trillion in foreign debt.

Mbadi was speaking on Tuesday when he appeared before the Senate Finance and Budget Committee.

Last week, MPs ha warned the situation wouldn’t get better, especially with debt service obligation set to increase to Sh2.47 trillion by June 2027.

Some Sh1.87 trillion was paid in the current financial year, with the projected figures set to keep the proportion of revenue to debt repayment at above 60 per cent.

Economic experts say this loosely means that for every Sh100 the government collects as revenue, only Sh40 is left for operations, salaries and development.

“This growing debt is likely to limit fiscal flexibility for other essential expenditures,” the National Assembly Liaison Committee said in a report.

On Tuesday, Mbadi told Senators that there is a debt owed to multilateral.

"It is 65.7 in terms of the nominal terms, which is still way above 55 per cent in nominal terms. But remember, we have come down from 72 per cent. So we are moving towards getting to 55 per cent by 2028-2029 financial year in nominal terms," Mbadi said.

 "In terms of external debts, we have the multilateral debts, bilateral debts, and then the commercial debts. In terms of multilateral debts, we have $2.83 trillion, which, if you look at it, is about 55 to 56 per cent of the total external debts are in multilateral."

MPs have further cautioned the government against relying on loan financing to bridge the fiscal deficit. “Relying on loan financing will contribute to the continued rise in public debt, which has already breached the record levels,” the committee said.

This comes hot on the heels of findings by the Controller of Budget that the government has breached the limits set in law.

The law says the debt should not exceed 55 per cent of the country’s gross domestic product, which the Treasury estimated at Sh16 trillion in September 2024.

Controller of Budget Margaret Nyakang’o recommended further cuts in spending to reduce the budget deficit financing.