Kenya’s Debt repayments jump 50pc

Kenya’s debt repayments to both internal and external creditors has increased by 50 per cent over the past year. The 2019 Edition of the Economic Survey indicates that total debt repayments increased from Sh448 billion in the 2016-17 financial year to Sh664 billion in 2017-18.

“Net servicing charges for both internal and external debt rose by 48.2 per cent to Sh664.2 billion in 2017-18,” the survey says.

This comes even as the Government is in China to negotiate additional loans that are expected to push up the country’s debt owed to China to record levels.

China now accounts for 70 per cent of the country’s external debt, with Kenya now owing the Asian nation Sh634.4 billion. This is more than twice the amount of money Kenya owes Germany, Japan, France, USA and Belgium combined.

“Net servicing charges on external and domestic debt servicing grew by 118.9 per cent to Sh234.7 billion in 2018-19, while that on domestic debt grew by 25.9 per cent to Sh429.5 billion in the same period.” The alarming debt levels come even as Kenya struggles to raise revenue.

According to the latest revenue statement from the National Treasury, the Kenya Revenue Authority has collected Sh1 billion against a target of Sh1.6 trillion in the 2018-19 financial year with less than three months left to the financial year.

Total government revenues stood at Sh1.6 trillion as at March 2019 against a Sh2.58 trillion target.

The high debt levels mean the Government is using the bulk of revenue on debt repayment.