President Kenyatta to end his term with a Sh7 trillion debt burden for Kenyan taxpayers

david nganga

September 26, 2018 6:37 PM

This implies a Sh2.13 trillion rise in the current debt which stood at Sh5.04 trillion as of June 2018.

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President Uhuru Kenyatta is likely to end his final term in 2022 with a Sh7.17 trillion debt burden for Kenyan taxpayers, Treasury projections show.

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The projected public debt typifies the Jubilee administration's borrowing spree since taking power in 2013 to to build new roads, a modern railway, bridges and electricity plants.

The increased debt has raised concerns due to the fact that it is ahead of revenue growth, indicating the widening gap and mounting pressure on the government’s capacity to repay loans.

The ability to generate and grow tax revenue is a strong indicator of future ability to repay debt.

Short-term loans

If the debt forecast comes to pass, Mr Kenyatta will have contracted at least Sh5.28 trillion debt to implement his manifesto in 10 years in power after he inherited slightly more than Sh1.89 trillion in June 2013.

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Treasury secretary Henry Rotich plans to spend Sh870.5 billion on debt repayments this year ending June next year from a Sh435.7 billion for the year ended June 2018 against expected taxes of Sh1.76 trillion.

Kenya has resorted to expensive short-term loans from international lenders after reduced access to cheaper international loans from multilateral lenders following an upgrade of its economy to lower middle-income in September 2014.

david nganga