Kenya Public Debt

Kenya’s debt has increased from 49 % of GDP in 2013 to 68% of GDP in 2020. Kenya’s debt dynamics need to be understood in the context of the fiscal deficits




The composition of external and domestic debt has changed and increased pressure on debt service: The share of commercial debt has increased from 22% to 36 % of total debt.


The rising debt & changing composition has seen a rise in debt service as a share of revenue from 16% in 2013 to a high of 32%. The current scenario can trigger a vicious cycle of debt dynamics.


Debt service crowds out social and development expenditure and can have serious social consequences. Also, when debt service is high there are fewer resources for other types of spending which are vital.


Recommendations on mitigation of the debt

1. The government should enhance the revenue forecasting capability & align expenditures to available resources to reduce fiscal deficits

2. The government should lengthen the maturity profiles & restructure borrowing towards concessional external debt to reduce the amounts paid in debt service. The restructuring should
include Treasury Bills to lower refinancing & rollover risk





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