Kenya’s public debt swells to over $45 billion

The Kenyan public debt ballooned in the past months to cross above the 45 billion U.S. dollars mark as the cash-strapped government accelerated borrowing.

The debt stood at 45.1 billion dollars at the end of December, 2017, the latest Quarterly Economic and Budgetary Review report from the Treasury released on Monday evening revealed.

At the end of 2016, the East African nation’s debt stood at 38 billion dollars, with the government accelerating borrowing from both domestic and external sources last year.

The debt does not include funds borrowed internally through Treasury bills and bonds in the past two months and the 2 billion dollars Eurobond Kenya sourced from the international market last week.

“During the period, 51.9 percent of the total public debt was foreign loans while 48.1 percent domestic,” said Treasury in the report.

External debt stock, including the 2013 International Sovereign Bond, stood at 23 billion dollars for the period ending December 2017.

“The debt stock comprised of multilateral (35.8 percent), bilateral (33.3 percent), suppliers credit (0.7 percent) and commercial banks (30.3 percent),” said the Treasury.

On the other hand, total gross domestic debt stock increased from 19 billion dollars billion as at end December 2016 to 22 billion by the end of December 2017.

“The overall rise of the debt was due to increased external debt mainly arising from exchange rate fluctuations and disbursement of external loans during the period,” said Treasury.

The Kenyan shilling ended 2017 at a low of 103.20 to the greenback, having declined, albeit gradually, for the better part of the year.

With increased borrowing from the domestic market and through the Eurobond this year, the East African nation’s debt can now be estimated at about 47 billion dollars, which is over 56 percent of the gross domestic product.

The government has defended the mounting debt, which has caused concern with economic experts warning that it is surging to unmanageable levels.

“We ask the government to seek measures to reduce the debt as it is reaching unsustainable levels,” International Monetary Fund resident representative to Kenya Jan Mikkelsen told parliament last week.