NAIROBI, Kenya – The administration of President William Ruto has exceeded the nation’s legal borrowing limits, as revealed in a new report by Controller of Budget Margaret Nyakang’o.
Public debt as of September 30, 2024, stood at Sh10.8 trillion, translating to 67% of the gross domestic product (GDP), which was recently estimated at Sh16.1 trillion.
Nyakang’o highlighted the breach, noting that the public debt exceeded the 55% GDP limit set by law, reaching 12% above the cap.
The National Treasury’s latest figures reveal the public debt comprises Sh5.19 trillion in external loans and Sh5.6 trillion in domestic borrowing.
“The public debt stock, therefore, surpassed the authorised public debt limit,” Nyakang’o stated, urging the administration to cut spending to manage the budget deficit.
The government borrowed over Sh210 billion between June and September 2024, equating to a borrowing rate of approximately Sh2.2 billion per day.
This follows amendments allowing the executive greater leeway in borrowing, despite earlier legislative efforts to cap debt.
In 2019, the government attempted to lower the debt ceiling from a 50% GDP ratio to a numerical limit of Sh9 trillion.
By 2022, further amendments reset the ceiling at Sh10 trillion to support the 2022-23 budget.
However, subsequent changes reverted to a percentage-based cap, set at 55% of GDP.
Budget experts warn that the rising debt will elevate borrowing costs and increase debt servicing expenses.
The Parliamentary Budget Office cautioned, “More loans would further crowd out resources for development and other critical recurrent expenditures in the medium term.”
The Controller of Budget stressed the importance of fiscal consolidation measures, recommending that borrowing should only finance productive projects.
Nyakang’o stated, “The National Treasury should pursue economic policies that support accelerated economic growth to enable the country to grow out of debt in the long run.”
As debt servicing remains a significant budgetary burden—amounting to Sh1.9 trillion for the current fiscal year—Nyakang’o’s warning comes at a critical juncture.
She highlighted that a staggering 89% of funds in the consolidated account go toward repaying loan principals and interest.
The Controller also raised concerns about whether borrowed funds are being used effectively, noting instances of unchecked spending on luxuries that violate Treasury-mandated austerity measures.
Public debt as of September 30, 2024, stood at Sh10.8 trillion, translating to 67% of the gross domestic product (GDP), which was recently estimated at Sh16.1 trillion.
Nyakang’o highlighted the breach, noting that the public debt exceeded the 55% GDP limit set by law, reaching 12% above the cap.
The National Treasury’s latest figures reveal the public debt comprises Sh5.19 trillion in external loans and Sh5.6 trillion in domestic borrowing.
“The public debt stock, therefore, surpassed the authorised public debt limit,” Nyakang’o stated, urging the administration to cut spending to manage the budget deficit.
The government borrowed over Sh210 billion between June and September 2024, equating to a borrowing rate of approximately Sh2.2 billion per day.
This follows amendments allowing the executive greater leeway in borrowing, despite earlier legislative efforts to cap debt.
In 2019, the government attempted to lower the debt ceiling from a 50% GDP ratio to a numerical limit of Sh9 trillion.
By 2022, further amendments reset the ceiling at Sh10 trillion to support the 2022-23 budget.
However, subsequent changes reverted to a percentage-based cap, set at 55% of GDP.
Budget experts warn that the rising debt will elevate borrowing costs and increase debt servicing expenses.
The Parliamentary Budget Office cautioned, “More loans would further crowd out resources for development and other critical recurrent expenditures in the medium term.”
The Controller of Budget stressed the importance of fiscal consolidation measures, recommending that borrowing should only finance productive projects.
Nyakang’o stated, “The National Treasury should pursue economic policies that support accelerated economic growth to enable the country to grow out of debt in the long run.”
As debt servicing remains a significant budgetary burden—amounting to Sh1.9 trillion for the current fiscal year—Nyakang’o’s warning comes at a critical juncture.
She highlighted that a staggering 89% of funds in the consolidated account go toward repaying loan principals and interest.
The Controller also raised concerns about whether borrowed funds are being used effectively, noting instances of unchecked spending on luxuries that violate Treasury-mandated austerity measures.
