Kenya's growing debt burden is becoming increasingly unsustainable and may include billions of shillings borrowed illegally, Safina Party leader and presidential aspirant Jimi Wanjigi has claimed.
Speaking during an interview with The Standard on the country's fiscal position, Wanjigi argued that the best way to solve Kenya's debt problem is by cancelling debts that were taken out of the country’s constitutional framework, a move he says will save taxpayers Sh2.8 trillion and thus eliminate the need to borrow.
According to Treasury figures, Kenya's public debt has risen to approximately Sh12.8 trillion this year, majority of which comprises domestic debt, which currently stands at Sh7.07 trillion. The country has accumulated Sh5.76 trillion in external obligations and has a debt-to-GDP ratio of about 69.5%.
The businessman has criticised President William Ruto’s administration for failing to make taxes work for Kenyans, as a large share of tax revenue goes into debt servicing.
"The real issue is not debt-to-GDP ratios. The question is how much of our revenue is going towards debt repayment," he said.
The businessman said 91 per cent of the country’s tax revenue goes into debt repayment, leaving limited resources for development projects and public services.
"When most of your revenue is going towards debt, you end up borrowing again to fund government operations. That is not sustainable," he said, adding that borrowing to pay recurrent expenditure is illegal.
The remarks come at a time when concerns over Kenya's fiscal position have intensified amid rising debt obligations, increased taxation and growing pressure on households and businesses.
However, Wanjigi's criticism is centred on what he describes as government’s failure to account for borrowed funds. He said opaqueness in public borrowing warrants a thorough audit that will determine what has been borrowed and how it was utilized over the years.
According to him, solving Kenya’s debt crisis must first include establishing which obligations were legally incurred and which ones were not. He then argues that the government can cancel debts acquired illegally, and dismisssed sentiments that this would be equal to defaulting.
"The question is simple. If debt was borrowed, where did it go and what development did it finance?" he asked.
Wanjigi traced what he termed the "original sin" of Kenya's debt crisis to a 2014 amendment to the Public Finance Management Act.
He alleged that the amendment altered constitutional safeguards governing public borrowing by exempting loan proceeds and related transactions from passing through the Consolidated Fund, the central account into which public revenues are ordinarily deposited under Article 206 of the Constitution.
According to Wanjigi, the change weakened oversight mechanisms involving Parliament, the Controller of Budget (COB) and the Auditor-General. These changes, he said, paved way for the country to acquire its first Eurobond of USD 2.75 million which was issued in June 2014.
“The auditor general only audits consolidated funds. So they were avoiding the permission of the COB and the audit of the auditor general, anchored in our laws,” he said.
He further alleged that the illegal changes left the country’s public finance infrastructure in the hands of two senior officials in the National Treasury who secured loans with little regard to the constitutional framework intended to guarantee transparency and accountability.
Wanjigi claimed that part of the debt accumulated over the last decade may constitute what he termed "illegal" or "odious debt" because it cannot be linked to constitutionally approved borrowing and expenditure processes.
"If it is not anchored in our laws, then it is not a debt that should be imposed on Kenyans," he said.
The politician also lamented on rising domestic borrowing which takes up 55 per cent of the country’s total debt, saying that it was squeezing the private sector and limiting access to affordable credit. The government plans to raise up to Sh1 trillion from the domestic market to finance the 2026-27 budget, according to the National Treasury. But Wanjigi questioned whether such borrowing can be sustained without harming economic growth.
"When government becomes the biggest borrower in the market, businesses and ordinary citizens find it harder to access credit," he said. Citing the low uptake of mortgages as an example, the presidential aspirant said domestic borrowing has led to high lending rates and disadvantaged ordinary Kenyans who would have benefitted from bank loans for their personal or business goals.
Out of a population of fifty million, with about 3.5 million Kenyans in formal employment, the country’s mortgage uptake is significantly low, with just over 30,000 active accounts.
The comments echo long-standing concerns among private sector players that government borrowing can crowd out private investment by absorbing available liquidity within the financial system.
Wanjigi also faulted the 13th Parliament for failing to cushion Kenyans from what he described as punitive tax measures which he argues do not end up benefiting Wanjiku. He said the August House lost credibility when youthful protesters breached Parliament in June 2024 after MPs passed tax laws that were largely protested by the public.
The businessman claimed that instead of listening to Kenyans, all that legislators care about is increasing taxes to the benefit of the Ruto administration.
“I saw something hilarious that they say in the public participation this year, 100,000 Kenyans said they want more taxes on themselves. Can you imagine a Kenyan going to sign that? Yes, tax me more. I mean, where does it ever happen in the world? This is just like rubbish,” said Wanjigi.
According to him, many households are struggling with rising living costs while public services such as healthcare, education and security continue to face challenges.
The businessman also dismissed arguments that President Ruto should not shoulder the blame for the country’s financial crisis, arguing that, since he took over, the Head of State has borrowed almost Sh4 trillion in four years, compared to his predecessor Uhuru Kenyatta who borrowed approximately Sh6.7 trillion in 10 years.
He further warned that the current financial crisis will only worsen and completely doing away with taxes is not a solution. The solution he argues, lies in identifying and cancelling odious debts which are an unnecessary strain to Kenyans.
