Kenya's Public Debt to Stand at Sh7 Trillion at the End of President Kenyatta's Term

Kenya's public debt will hit Sh7 trillion by the time President Kenyatta leaves office in 2022, National Treasury projections indicate.

As of June 2018, the country's public debt stood at Sh5.04 trillion and the National Treasury expects the debt to increase further by Sh2.13 trillion by 2022.

In their draft Budget Review and Outlook Paper, Treasury heads project the debt will hit Sh7.17 trillion, Business Daily reports.

This means that Kenyatta would have borrowed about Sh5.27 trillion during his 10-year reign after he inherited a Sh1.89 trillion debt in June 2013 from his predecessor Mwai Kibaki.

Economist Jibran Qureishi attributes the growth in public debt to over-budgeting leading to ambitious tax targets that have always not been met by Kenya Revenue Authority (KRA).

“When you do that (have ambitious revenue targets) from the beginning, you feel like you have enough room for maneuver when it comes to expenditure, but reality is you are not going to achieve that tax number,” Mr Qureishi said.

So far, foreign commercial banks account for 37.85 per cent (Sh968.9 billion) of the Sh2.56 trillion external debt.

“The emerging concern is that the government’s appetite for borrowing seems unlikely to wane any time soon and this could eventually push debt towards unsustainable levels,” the parliamentary Budget Office says in its budget watch report released last month.