Kenya’s total public debt is currently Sh100 million shy of hitting the Sh6 trillion mark even as President Kenyatta’s administration appetite for borrowing continues to increase.
The amount is projected to grow further in the coming months after it emerged that 44 new foreign loan agreements have recently been tabled in Parliament for approval while others are still under negotiation, according to Business Daily.
The Sh5.902 trillion total public debt comprises Sh2.836 trillion in domestic debt while the total external public liability stands at Sh3.066 trillion.
The amount does not include the external debt that may have been incurred between July and October this year.
Last week, the National Assembly approved a request by National Treasury to raise the public debt ceiling to Sh9 trillion.
The total public debt as a percentage of the gross domestic product (GDP) stood at 55.2 percent at the end of the 2018/19 financial year in June 2019.
Despite growing concerns over the ballooning public debt, Treasury insists the debt is still sustainable as it is still below the threshold of 70 percent of GDP.
“Kenya’s debt ratios show external debt is within sustainable levels for a country rated as a strong performer. The debt sustainability indicators show that Kenya faces a moderate risk of external debt distress,” said the Treasury in its preliminary Budget for the next fiscal year.
“Total public debt as a proportion of GDP remains well below the Lower-Middle Income country debt sustainability benchmark of 70 percent of GDP in present value terms. Overall, debt sustainability analysis indicates that public sector debt continues to be sustainable although Kenya’s current external debt risk of distress categorization has moved from low to moderate.”