NAIROBI, Kenya — Treasury Cabinet Secretary John Mbadi has dismissed claims by Kiharu MP Ndindi Nyoro that Kenya is on the brink of defaulting on its debt obligations.
Speaking before Parliament on Wednesday, Mbadi acknowledged the country’s current liquidity pressures, which stem from the maturation of previously acquired loans, but firmly stated that Kenya is not facing a debt sustainability crisis.
Mbadi criticized Nyoro’s comments, calling them “irresponsible” and stating that such statements could unnecessarily provoke panic.
“It can cause unnecessary panic and should not come from someone who has chaired the Budget and Appropriations Committee,” Mbadi remarked.
While admitting that Kenya is experiencing fiscal challenges, particularly in terms of cash flow and the timing of loan maturities, Mbadi emphasized that Kenya’s debt position remains sustainable.
“Yes, there have been difficult moments. But as it stands, our debt is sustainable,” he said, pointing out that both the International Monetary Fund (IMF) and the World Bank have reviewed the country’s debt and provided positive assessments.
Mbadi explained that the key challenge is liquidity, which is exacerbated by loans that were contracted at different times and are maturing in the coming years, particularly between now and 2032.
However, he highlighted that after 2032, Kenya’s external debt obligations significantly decrease, with minimal repayments scheduled from 2034 to 2048.
“From 2034 to 2048, there is hardly any external debt to repay—whether bilateral, commercial, or multilateral,” Mbadi noted, stressing the need for collaboration among the government’s various arms to effectively navigate the current fiscal pressures.
The CS also reassured the public that Kenya would not default on its loans, asserting, “There is no scenario in which Kenya will default on its loans. We remain the strongest economy in the region, and such unfounded fears only damage public confidence.”
Defending the government’s fiscal record, Mbadi pointed out that despite the strain, essential services such as salaries for civil servants, school capitation funds, and allocations to counties have continued to be paid without fail.
Nyoro, who had earlier warned that Kenya risks becoming one of Africa’s debt defaulters, has criticized the rising debt burden, which he estimates at KSh 11 trillion.
He attributed this to excessive taxation and economic hardship, arguing that increasing taxes distorts economic decisions and hampers private spending.
With Kenya’s debt continuing to rise, Mbadi’s remarks come as the government prepares its 2025/26 budget, which includes projected expenditure of KSh 4.2 trillion, with KSh 1 trillion earmarked for interest payments.
Public debt is a growing concern, and Nyoro’s comments, particularly regarding ongoing debt restructuring talks with China, have raised alarms about the long-term impact of Kenya’s debt strategy.
