Public debt stood at Sh11.36 trillion as of March 31, the Controller of Budget has said.
Dr Margaret Nyakang’o said this comprises Sh5.24 trillion owed to external lenders (46 per cent) and Sh6.12 trillion due to domestic lenders.
In her budget implementation review report for the first nine months of 2024/2025, Nyakang’o said the public debt stock increased by 7 per cent from Sh10.58 trillion on June 30, 2024.
“External debt increased by 1 per cent due to additional loan disbursements of Sh194.05 billion from foreign commercial banks and Sh126.28 billion from multilateral organisations, while domestic debt recorded 13 per cent growth attributable to increased borrowing in the domestic market. Notably, the supplier credit has recorded neither loan disbursement nor repayment in the first nine months of FY2024/25.”
At the same time, CoB said the allocation towards servicing the public debt in 2024/2025 amounted to Sh2.04 trillion, representing 89 per cent of the Consolidated Fund Services budgetary allocation, compared to Sh1.87 trillion allocated in 2023/2024.
This comprised Sh1.05 trillion for principal and Sh995.77 billion for interest payments.
Allocation towards external debt comprised Sh476.40 billion for principal and Sh259.91 billion for interest, while domestic debt comprised Sh569.89 billion and Sh749.24 billion towards principal redemption and interest payment, respectively.
“Total expenditure on public debt in the first nine months of FY 2024/2025 amounted to Sh1.20 trillion, representing 59 per cent of the revised estimates, compared to Sh1.24 trillion (66 per cent) recorded in a similar period, FY 2023/2024. The decrease is attributed mainly to a reduction in the external debt principal and interest payments, which stood at Sh465.48 billion compared to Sh614.187 billion paid in a similar FY 2023/24 period,” she explained.
The external debt servicing amounted to Sh466.73 billion, comprising Sh295.27 billion on principal payment, Sh170.20 billion on interest payment, Sh770.54 million on commitment fees, Sh2.80 million on penalties paid first, and Sh477.14 million on other charges – service fees.
The total domestic debt payment was Sh729.45 billion, consisting of Sh186.85 billion and Sh542.60 billion for principal and interest payments, respectively.
On the overdraft facility, which is a way of short-term borrowing by the Government to cover temporary cash shortfalls, the CoB said the limit stood at Sh97.05 billion and was charged at an average interest rate of 12 per cent per annum on the amount outstanding at the end of each month.
As of March 31, the guaranteed debt stock stood at Sh80.08 billion, compared to Sh100.16 billion as of June 30, 2024.
The revised allocation towards servicing the guaranteed debt in 2024/2025 amounted to Sh19.69 billion for Kenya Airways guarantee (for local banks), representing 1 per cent of the CFS budgetary allocation, compared to Sh17.19 billion allocated in 2023/2024.
Total expenditure on guaranteed debt in the first nine months of 2024/2025 amounted to Sh19.69 billion, representing 100 per cent of the revised estimates, compared to Sh17.44 trillion (101 per cent) recorded in a similar period in 2023/2024.
In other areas highlighted by the CoB, the allocations for salaries and allowances and miscellaneous services (SAM) amounted to Sh4.21 billion, revised to Sh4.14 billion in Supplementary Estimates II, compared to Sh4.74 billion allocated in 2023/2024.
“The decline is attributed to implementing a recommendation by the Controller of Budget that budgeted salaries and allowances of the constitutional office holders be aligned to the gazetted remuneration by the Salaries and Remuneration Commission in previous Budget Implementation Review Reports,” she explained.
The total expenditure towards SAM in the first nine months of 2024/2025 was Sh2.97 billion, representing 72 per cent of the annual estimates, compared to Sh2.49 billion (52 per cent) recorded in a similar 2023/2024 period.
“We have observed that the budget for the Independent Electoral and Boundaries Commission was unutilized, most likely due to the absence of Commissioners. Further, the National Police Service Commission and Kenya National Commission on Human Rights spent 28 per cent and 58 per cent, respectively, of their budgets in the first nine months of FY 2024/25, which was way below the 75 per cent target. The National Treasury should ensure appropriate reallocations in Supplementary Budget III by providing a realistic budget for SAM,” she stated.
By Irene Githinji
