This is because the country’s public debt currently stands at Sh5.27 trillion.
According to the 2019 Medium Term Debt Management Strategy (MTDS) tabled in parliament on Thursday last week, the principal public debt currently stands at Sh5.27 trillion with an average maturity of 16.9 years, a year lower than an average maturity of 17.5 years in 2017.
The report further indicated that Kenya’s weight average interest rate is 7.7 per cent with average interest for external debt at 4.4 per cent while that of domestic loans is at 11.6 per cent.
This, therefore, means that if Kenya was to retire its total debt today, it will have to incur an annual interest of Sh400 billion, this without factoring in foreign currency volatility.
With the debt maturity standing at an average of 16.9 years, it means the country will have to pay a total of Sh6.76 trillion in interest in addition to the principal debt of Sh5.2 trillion, bringing its compound debt to Sh11.9 trillion.
The amount is way above Kenya’s Gross Domestic Product (GDP) estimated at Sh8.2 trillion, meaning the country’s net worth is in the negative.
Treasury report shows that 50.9 per cent of Kenya’s total debt is in foreign currency.
The World Bank and China are Kenya’s top lenders. As at the end of June 2018, the World Bank’s total lending to Kenya stood at Sh581 billion ($5.8 billion), slightly ahead of China’s Sh557 billion ($5.5 billion).
The hefty loans owed to China and the World Bank continue to give the two foreign lenders significant influence on the country’s economic policy planning.
World Development Indicator (WDI) estimates Kenya’s population at between 49.7 million and 51.7 million, averaging slightly above 50 million.
This means that each Kenyan owes lenders an average Sh240,000 to be settled on or before November 2035.