Treasury defends economic resilience, debt strategy and public finance reforms
National
By
Mike Kihaki
| Jun 17, 2026
The National Treasury has defended Kenya’s economic performance, debt management strategy and public finance accountability systems, insisting that the economy remains resilient despite global uncertainties and domestic challenges.
In a response to the Senate, Treasury Cabinet Secretary John Mbadi said the country had continued to record positive growth across key sectors even as it grappled with external shocks, including conflict in the Middle East and drought-related risks experienced in late 2025.
“Against this global backdrop, the Kenyan economy continues to demonstrate resilience despite facing elevated external risks,” said Mbadi.
According to the Treasury, Kenya’s economy expanded by 4.6 per cent in 2025, a slight decline from the 4.7 per cent growth recorded in 2024.
The Cabinet Secretary attributed the slowdown to external factors that affected global commodity markets, investor confidence and financial conditions.
The remarks were contained in responses to a series of questions raised by senators, among them Kisumu Senator Tom Ojienda, who sought clarification on government measures to address slowing economic growth and the country’s debt position.
On public debt, Mbadi told the Senate that Kenya’s public and publicly guaranteed debt stood at approximately Sh12.842 trillion as of February 26, 2026. The amount represents 69.49 per cent of the country’s Gross Domestic Product (GDP).
Of the total debt stock, domestic debt accounts for Sh7.063 trillion while external debt stands at Sh5.779 trillion.
The Treasury noted that multilateral lenders remain Kenya’s largest source of external financing, followed by commercial and bilateral creditors. The government has in recent years sought to increase reliance on concessional borrowing while managing debt servicing obligations amid pressure on public finances.
The ministry also highlighted progress achieved under the implementation of Kenya Vision 2030, the country’s long-term development blueprint launched in 2008 to transform Kenya into a middle-income economy through investments in infrastructure, education, health and social services.
According to Mbadi, the government has expanded access to education through the construction of hundreds of secondary schools and the rollout of the Competency-Based Curriculum (CBC).
“In the health sector, reforms were implemented to advance Universal Health Coverage,” he said.
The CS cited the transition from the National Hospital Insurance Fund (NHIF) to the Social Health Authority (SHA) as a key reform aimed at improving access to healthcare. He also pointed to expanded community health services and increased investment in affordable housing projects.
“Another important achievement of Kenya Vision 2030 has been the expansion of equity and inclusion through devolution, social protection, education, health, water, housing and digital connectivity,” Mbadi added.
On concerns over public spending and accountability, the Treasury said it has strengthened electronic procurement systems through provisions in the Public Finance Management Act and related regulations.
The reforms are intended to improve transparency, efficiency and accountability in both national and county governments.
Responding to concerns raised by nominated Senator Hamida Kibwana regarding unresolved audit queries flagged by the Auditor-General, Mbadi said constitutional and legal frameworks already provide mechanisms for tracking, reviewing and resolving audit issues.
He maintained that the government continues to strengthen oversight and accountability systems to ensure ministries, departments and agencies implement corrective measures and improve public financial management.