NAIROBI, Kenya – Kenya shilling continues to register strong performance against the US dollar and other global currencies, a fit that has seen decline in the country’s public debt.
Data from the Controller of Budget (CoB) quarter review showed that in the first nine months of the fiscal year 2023/24, Kenya’s debt declined to Sh10.24 trillion.
Why Kenya’s debt declined in 2024
CoB Margaret Nyakang’o attributed this to the strength of the shilling in the past three months to March 2024, when it ranked among the top performing global currencies.
“As of 31st March 2024, the public debt stock stood at Sh10.42 trillion, comprising Sh5.16 trillion (49.6%) dues to external lenders and Sh5.26 trillion (50.4%) dues to domestic lenders.
“Between 31st December 2023 and 31st March 2024, external debt decreased by 15.2 percent, while domestic debt increased by 9 percent. This decrease in external debt is due to the strengthening of the Kenyan Shilling against major foreign currencies,” Nyakang’o stated in the report.
According to the Central Bank of Kenya (CBK), the shilling currently trades at KSh 131.87 against the US dollar.
The regulator maintained that its foreign exchange reserves are adequate and can go up to four months of imports.
How much does Kenya plan to pay in debts?
The CoB report showed that the National Treasury allocated Sh1.75 trillion towards public debt servicing for the same period, but later revised it to Sh1.87 trillion in the Supplementary Estimates I.
“The revised public debt allocation for FY 2023/24 is Sh1.87 trillion, comprised of Sh918.84 billion for interest payments and Sh947.2 billion for redemptions (principal payments).
“Allocation towards servicing external debt amounted to Sh839.14 billion, comprising Sh566.66 billion for redemptions and Sh272.48 billion for interest payments. Allocation to domestic debt amounted to Sh1.03 trillion, comprising Sh380.54 billion for redemptions and Sh646.36 billion for interest payments,” read the report in part.
CoB noted that the total expenditure on public debt in the same period under review was Sh1.24 trillion, representing 67% of the revised annual estimates.
External debt servicing amounted to Sh615.76 billion, consisting of Sh430.73 billion for redemptions, Sh 183.45 billion for interest payments, Sh1.32 billion for commitment fees, and Sh262.03 million as other charges.
