Kenyas debt hits Ksh.8 trillion

Kenya’s debt stock has hit a new record of Ksh.8 trillion mirroring the country’s increased borrowing in recent years.

According to new data from the National Treasury which is contained in the latest quarterly economic and budget review report (QEBR) gross public debt has increased by Ksh.875.7 billion in the past year to reach Ksh.7.996 trillion as of September 30.

 “The increase in the public debt is attributable to external loan disbursements, exchange rate fluctuations, and an uptake of domestic debt in the period,” noted the exchequer.

Total external debt stands at Ksh.4.058 trillion and comprises Kshs.1.149 trillion bilateral loans, Ksh.1.699 trillion in loans accruing to multilateral lenders and Ksh.1.196 trillion owed to commercial banks.

Meanwhile, total domestic debt stands at Ksh.3.938 trillion including a Ksh.90.9 billion in debt contracted from the Central Bank of Kenya (CBK), Ksh.1.917 trillion worth of loans owed to local commercial banks and Ksh.1.929 trillion owed to no-banks and non-residents.

The stock of gross domestic debt has increased by Ksh.480.7 billion year-on-year from Ksh.3.457 trillion in September 2020.

Nevertheless, the National Treasury has bettered its domestic debt metrics cutting the stock of the short-timed Treasury bills from Ksh.131.3 billion to Ksh.763.5 billion.

However, Kenya’s external debt remains biased towards dollar terms with the stock of debt denominated in the dollar terms rising to Ksh.4.125 trillion ($36.733 billion).

Nearly half of the foreign debt is owed to multilateral lenders at 41.9 per cent with commercial banks holding 29.5 per cent of the debt.

28.3 per cent of the external debt stock lies with bilateral sources while the 0.3 per cent balance is held as suppliers’ credit.

“The increase is attributed to increase in external loan disbursements and exchange rate fluctuations during the period,” added the National Treasury.

China and Japan are the largest bilateral creditors with their respective debt stocks standing at Ksh.774.9 billion ($6.9 billion) and Ksh.168.5 billion ($1.5 billion) respectively.

Meanwhile, three-quarters of external commercial debt is in the form of sovereign bonds commonly termed Eurobonds.

According to data from the draft Budget Policy Statement (BPS) which was published last week, the stock of public debt is expected to reach Ksh.8.6 trillion in June 2022 before stretching to Ksh.11.6 trillion four years later in June 2026.