Grapevine

What Kenya needs to do to get out of its growing debt crisis

Treasury CS John Mbadi. [Elvis Ogina, Standard]

Over the last two decades, Kenya’s public debt has undergone a significant transformation, evolving from manageable levels of public debt in the early 2000s to a source of national concern by 2024.

This journey, marked by ambitious infrastructure projects and external shocks, has left the country at a crossroads.

The newly appointed Cabinet Secretary for Treasury, John Mbadi, has a tough job of implementing the 2024/2025 budget amidst heavy debt burden, rising inflation and the public’s general opposition to tax increases. The choices Kenya makes going forward will determine whether it can navigate its debt challenges and secure a stable economic future.

In 2002, Kenya’s public debt was a modest Sh 630 billion, equivalent to about 55 per cent of the country’s GDP. At that time, most of the debt was domestic, and the government’s borrowing was carefully controlled.