Kenya’s public debt has crossed the Sh5 trillion mark, meaning that every Kenyan now owes the lending institutions at least Sh110,000.
Although Treasury documents tabled in the National Assembly put the debt at Sh4.9 trillion as at June 2017, by February this year, the country had borrowed another Sh220 billion largely for infrastructure development and electricity connection.
The bulging debt reflects the Jubilee administration’s appetite for loans notwithstanding their accumulation with fears that the borrowing may not be sustainable.
Currently, the Kenyan debt to Gross Domestic Product (GDP) ratio is at 50 per cent.
But National Treasury Cabinet Secretary Henry Rotich downplayed fears over the ballooning public debt.
“The public debt is manageable as long as the economy is growing. One question one needs to ask; is the debt growing more than the country’s economic growth? If the economy is not growing then there is a problem,” Mr Rotich said after unveiling the Sh3.074 trillion budget for the 2018/19 financial year.
Of the Sh741 billion Kenya owes 13 countries in commercial loans, China is leading the pack with Sh534 billion. Kenya owes France Sh64.8 billion, Japan Sh51 billion and Germany Sh26 billion. About Sh3 billion and Sh478 million is owed to the US and United Kingdom, respectively.
The World Bank is owed Sh508.9 billion while the Africa Development Bank is asking Sh206.3 billion.
“We are now relishing the benefits of an expanded economy that is more competitive and well rated not only in the East African region, but also in the whole of Africa,” the CS said.
Mr Rotich noted that in the next financial year, the economy is expected to grow at 5.8 per cent compared to 4.9 per cent this year.
This growth, he said, is expected to be supported by investor confidence courtesy of stability in the political arena.
National Treasury PS Kamau Thugge said the economy has been on a steady rise for the last five years. The PS noted that things look even better now after the famous handshake between President Uhuru Kenyatta and opposition leader Raila Odinga.
Debt servicing affects a country’s development plans. This year alone, the country is required to repay about Sh700 billion to offset its commercial debt.