Written By Lisa Murimi
The Kenyan government plans to borrow over Ksh 700 billion from local and international markets to address the deficit in the 2024/2025 budget.
Treasury Principal Secretary Chris Kiptoo revealed this strategy during a session with the National Assembly Committee on Public Debt and Privatisation.
Ksh 356.4 billion will be sourced from external markets, while Ksh 399.9 billion will be raised domestically through government securities such as Treasury Bills and Bonds.
“The PS told the members that following the rationalisation of the approved budget as directed by the President following the non-assent of the Finance Bill 2024, the overall fiscal deficit increased from Ksh 597 billion in the approved budget to Ksh 761 billion in Supplementary Estimates I,” the Committee’s statement read in part.
This shift has necessitated increased borrowing to manage the financial gap.
The external borrowing target has risen to Ksh 356.4 billion, up from Ksh 333.8 billion, while domestic borrowing is set to increase significantly from Ksh 258.5 billion to Ksh 399.9 billion, which is 2.2% of GDP.
Dr. Kiptoo also addressed Kenya’s current debt, which stood at over Ksh10.5 trillion as of June 2024. Most of this debt is domestic, primarily held in Treasury Bonds.
Public and publicly guaranteed debt accounts for Ksh5.150 trillion (48.8% of total debt) in external debt, largely owed to multilateral creditors, and Ksh5.410 trillion (51.2%) in domestic debt.
These adjustments follow the withdrawal of the Finance Bill 2024 and subsequent revision of budget estimates, reflecting the government’s response to fiscal challenges and commitment to managing the nation’s financial health.
