Treasury faulted for inconsistent debt figures

The National Treasury has been faulted for presenting delayed and inconsistent figures on the size of debt and interest payments even as it seeks to raise borrowings beyond Sh9 trillion.

The Commission on Revenue Allocation (CRA) says, in submissions to the Senate Committee on Finance and Budget, that there has been no consistency in the public debt service figures reported by different publications produced by the National Treasury.

The difference, CRA says, has not been explained, raising questions on Kenya’s debt sustainability ahead of the 2022 budget.

CRA says that for instance, Treasury’s recently published budget policy statement (BPS) for 2022-23 budget showed a different debt interest servicing amount compared to what was disclosed in the Medium-Term Debt Management Strategy (MTDS).

In the BPS published last month, Treasury said it spent Sh495.1 billion as interest payments on debt during the financial year ended June 2021.

However, Treasury’s annual public debt report released in September had put the provisional total debt service for the financial year ended June 2021 at Sh780.6 billion— a Sh285.5 billion difference.

Treasury, in the published in February, had also showed it spent Sh458.2 billion—another difference from the figures in BPS and public debt report.

“There was no consistency in the public debt service figures reported by different publications produced by the National Treasury,” said CRA.

“There was need for provision of consistent figures and, or, reasons given for the inconsistencies from different publications produced by the National Treasury at the same time.”

A check by The Standard showed the BPS puts interest payments in the year ended June 2021 at Sh495.1 billion—split between domestic (Sh388.8 billion) and Sh106.3 billion for foreign.

MDTS, however, puts total debt service at Sh458.2 billion in the financial year ended June 2021 and projects this to hit Sh713.8 billion 2024-25.

It is only in the annual public debt report that Treasury gives a full breakdown of the debt burden in the year.

Here, Treasury shows that it spent Sh495.1 billion on domestic and external interest payments and another Sh285.49 billion on domestic Treasury bond repayments and external principal repayments, bringing total debt service to Sh780.63 billion.