Kenya's public debt rises Sh7 trillion after country borrows Sh374 billion in 2 months

Kenya's total public debt has been pushed to more than Sh7 trillion by the end of August 2020 after the country has borrowed Sh374 billion in two months, according to a news report by The Standard.

The Central Bank of Kenya (CBK) has shown that nearly 60 percent of the borrowed cash between July and August came from the domestic market, where Treasury got Sh224 billion.

At Sh7 trillion, this means that public debt is Sh2 trillion shy of the Sh9 trillion ceiling that Parliament set for the National Treasury.

Treasury has gone on a borrowing spree following the outbreak of COVID-19, which has disrupted economic activities and left the Government in a fix. Revenues are low but the State is still expected to help stimulate the economy.

Although a large chunk of the borrowing was from the domestic market, the share of local loans still trails that of external debt which stood at Sh3.66 trillion in the period under review.

External debt rose by Sh151 billion between July and August. In the last few months, the Government has received cheap loans from multilateral institutions, including the World Bank, the International Monetary Fund (IMF), and the African Development Bank.     

Domestic debt from banks, insurance firms, pension funds, and overdrafts from CBK in the financial year (FY)2020/21, stood at Sh3.4 trillion by end of August.