NAIROBI, Kenya – Kenya is among 23 nations poised to allocate over 20 percent of their revenue to external debt repayment, spotlighting the growing financial strain under President William Ruto’s administration.
A recent report by Debt Justice, in collaboration with the UK-based non-state agency Christian Aid, reveals that Kenya will spend 26.1 percent of its domestic revenue on external loan repayments in 2023.
This is the eighth highest percentage on the continent, with Angola leading at 59.8 percent, followed by Zambia (43.5 percent), Egypt (38.8 percent), Djibouti (37.8 percent), Tunisia (31.4 percent), Gabon (29.1 percent), and Benin (27.3 percent).
The report, titled “Between Life and Debt,” highlights the rapid increase in Kenya’s external debt payments, which have surged from an average of six percent of government revenue between 2008 and 2016 to 24 percent in 2019, now standing at 26.1 percent.
Alarmingly, nearly half of these payments between 2023 and 2025 are directed toward private creditors, primarily bondholders, who charge the highest interest rates and demand the shortest maturities.
A significant portion of the debt is owed to China, with the remainder owed to multilateral lenders and other governments.
The burden of rising debt payments has led to a steep decline in public spending. From 2017 to 2022, real public spending per person fell by 15 percent; by 2025, it is projected to be seven percent less than in 2017.
This reduction is evident in essential services, with hospitals lacking medicines and specialized equipment and schools experiencing delays in government disbursements.
According to the National Taxpayers Association, a Christian Aid partner, the austerity in public spending has adversely affected health and education facilities.
The government has struggled to keep up with these payments despite ongoing borrowing from multilateral lenders.
The debt crisis has sparked widespread public dissatisfaction, leading to bi-weekly protests and prompting President William Ruto to establish an independent task force to conduct a comprehensive forensic audit of the public debt.
“Public debt continues to be a major point of engagement and conversation in Kenya,” President Ruto said in a recent address from State House. “I have today appointed an independent task force to carry out a comprehensive forensic audit over public debt and report to us in the next three months.”
The report also points out that 28 African countries will have external debt payments exceeding 14 percent of government revenue in 2024, with 23 of these surpassing the 20 percent mark.
This starkly contrasts to 2010, when no African government spent more than 20 percent of revenue on external debt payments, and only Tunisia spent more than 14 percent.
Christian Aid advocates for widespread debt cancellation from all creditors, including private creditors, whom it accuses of delaying and weakening debt relief initiatives.
They argue that these creditors must be involved in solutions to ensure a more just global economic system that does not perpetuate poverty.
“Actions to cancel debts should happen alongside efforts to build a global economic system that is more just and does not consign the global majority to poverty while accumulating wealth for a tiny, yet powerful, global minority,” the report concludes.
