Kenya’s domestic debt has crossed KES 6 trillion for the first time in history. Up from KES 4.81 trillion when President William Ruto took office.
Kenya’s domestic debt has reached an unprecedented KES 6 trillion as of February 2025, a staggering increase from KES 183 billion recorded in 2000, according to the latest data from the Central Bank of Kenya (CBK).
The dramatic surge, which reflects a more than 30-fold rise over 25 years, underscores the country’s growing reliance on internal borrowing to finance its budget amid persistent economic challenges.
The milestone figure pushes Kenya’s total public debt to approximately KES 11.2 trillion, factoring in external liabilities, highlighting a rapid escalation under the current administration.
Analysts attribute the ballooning domestic debt to a combination of factors, including increased government spending, revenue shortfalls, and a strategic shift toward local borrowing to mitigate foreign exchange risks following the Kenyan shilling’s volatility in recent years.
In 2000, Kenya’s domestic debt stood at a modest KES 183 billion, a manageable burden relative to the size of the economy at the time.
However, successive governments have leaned heavily on Treasury bills and bonds to fund infrastructure projects, recurrent expenditure, and debt servicing, driving the figure to its current level.
By February 2025, domestic debt accounts for roughly half of the nation’s total public debt stock, a shift that has raised concerns about fiscal sustainability.
Treasury officials have defended the borrowing, citing investments in critical sectors like healthcare, education, and transport as justification.
However, critics argue that much of the borrowed funds have been mismanaged or allocated to non-productive areas, leaving taxpayers with a mounting burden.
Netizens have echoed this sentiment, with some users noting that the debt has risen by KES 2.5 trillion since the current regime took office, intensifying public scrutiny.
The CBK report also reveals that debt servicing now consumes a significant portion of Kenya’s revenue, with estimates suggesting that seven out of every ten shillings collected in taxes go toward repayments.
This squeeze has sparked debate over the government’s fiscal strategy, especially as the debt-to-GDP ratio hovers above 67%, well beyond the 55% threshold recommended by fiscal experts.
Economic experts warn that without aggressive revenue mobilisation or expenditure cuts, Kenya risks a debt crisis that could stifle growth and strain public services.
The Treasury has yet to comment officially on the February figures, but pressure is mounting for a clear plan to address the escalating debt load.
As policymakers grapple with these challenges, the public awaits further details on how the government intends to balance its borrowing habits with the urgent need for economic stability.
