Kenya’s Debt Surged To Ksh. 11.1 Trillion In 2023

Kenya’s debt burden soared to KSh 11,139.7 billion by December 31, 2023, marking a substantial increase of KSh 1,930.9 billion compared to KSh 9,208.8 billion recorded at the close of 2022. The debt composition reveals a distribution of 54.7% external debt and 45.3% domestic debt, with the surge attributed to factors such as external loan disbursements, exchange rate fluctuations, and a rise in domestic debt uptake.

Gross domestic debt witnessed a notable rise of KSh 514.5 billion, climbing from KSh 4,535.6 billion in December 2022 to KSh 5,050.1 billion by the end of 2023. Of particular significance is Kenya’s debt to China, which stood at US$ 6,000.71 million by the end of 2023, marking the highest among the country’s debt obligations. This was followed by debts to Japan (US$ 1,269.92 million), France (US$ 753.72 million), Germany (US$ 349.60 million), and Italy (US$ 212.13 million), among others.

The Quarterly Economic and Budgetary Review released by Kenya’s National Treasury and Planning Ministry further details that external debt service between July and December 2023 was primarily attributed to China, France, Italy, Japan, and Spain, among other bilateral and multilateral donors.

In dollar terms, the external public debt stock surged by US$ 1,042.6 million, from US$ 37,878.01 million in December 2022 to US$ 38,920.6 million by December 2023. This rise was driven by increased external loan disbursements and exchange rate fluctuations.

The breakdown of external public debt distribution highlights debts owed to multilateral lenders (50.3%), commercial banks (26.1%), bilateral sources (23.4%), and Suppliers Credit (0.3%). While multilateral institutions, commercial banks, and suppliers’ credit recorded an upsurge in external public debt stock, bilateral sources saw a decrease during the review period.

Cumulative debt service payments to external creditors amounted to KSh 239.6 billion by the end of December 2023, comprising principal (56.2%) and interest (43.8%) payments. These developments underscore the complex dynamics of Kenya’s debt landscape, reflecting the challenges and implications of managing a growing debt portfolio amidst evolving economic conditions.