The country’s public debt increased by about Sh310 billion in the first quarter of the current financial year as the government continued to engage more lenders to refinance previous loans and development projects in the country.
Documents from the National Treasury show that the country’s public debt stock stood at about Sh10.58 trillion as at September 2023, up from Sh10.27 trillion in June 2023.
Treasury Principal Secretary Chris Kiptoo, in a presentation to the National Assembly’s Public Debt and Privatisation Committee, said the increase in the debt was also caused by the continued decline of the Kenyan shilling against the US dollar.
“The Gross Public Debt comprises Sh5.66 trillion external debts and Sh4.92 trillion domestic debts. The depreciation of the Kenya Shilling has been the primary driver of nominal growth of external debt,” said Dr Kiptoo.
Dr Kiptoo also stated that in terms of refinancing, the net external financing in the 2023/24 Financial Year Supplementary 1, has also been revised upwards by Sh412.1 billion.
This is due to new sources of external concessional financing from multilateral agencies and the increased cost of domestic borrowing, while the net domestic financing has been revised downwards to Sh449.2 billion.
Further, in Quarter 1 of the fiscal year 2023/24, the PS stated that the external debt service payments stood at Sh151.1 billion, comprising principal repayments of Sh 89.4 billion and interest payments of Sh62.7 billion.
According to the PS, the government has not accumulated any debt arrears as of now, having cleared the domestic interest at a sum of Sh125.9 billion, and rolled over the redemptions of Treasury Bills and Bonds.
The Public Debt committee chaired by Balambala MP Abdi Shurie, held a series of meetings to discuss the Consolidated Fund Services (CFS) Expenditures, under the Supplementary 1 Estimates for 2023/24 Financial Year.
Also appearing before the committee was the Controller of Budget, Margaret Nyakang’o, who presented the exchequer issues to various components of the CFS account as of November 2023.
In her presentation, Dr Nyakang’o noted that the increase in the Supplementary 1 Estimates for external debt service of Sh216.67 billion to Sh839.14 billion from Sh622.47 billion, is partly attributed to the depreciation of the Kenya Shilling, which has led to an increase in the value of dollar-denominated public external debt equivalent to the percentage decline in the local currency.
“The CFS category with the highest proportion of the total budget allocation for FY 2023/24 is public debts at Sh440.4 billion, which accounts for 88.3% of the total budget allocation followed by pensions and gratuities at Sh44.7 billion, at 10.3% and salaries, allowances and miscellaneous, at Sh7.9 billion, accounting for 1.5%,” Dr Nyakang’o said.