Debt Surpasses KSh 12 Trillion Mark

Kiharu Member of Parliament Ndindi Nyoro has sharply criticized the national government's borrowing strategy, accusing it of pushing Kenya's public debt to unsustainable levels. Speaking at the 42nd annual conference of the Institute of Certified Public Accountants of Kenya (ICPAK) in Mombasa on Wednesday, November 19, 2025, Nyoro claimed the national debt had surged to KSh 12.5 trillion. He asserted that the current administration has borrowed KSh 3.8 trillion in three years, a figure he contrasted with previous governments.

Official data from various financial institutions corroborates the rising debt figures. According to a report by The Kenyan Wall Street, Kenya's public debt officially crossed the KSh 12 trillion threshold for the first time in September 2025, reaching KSh 12.06 trillion. Similarly, the Controller of Budget, Dr. Margaret Nyakang'o, reported to the National Assembly's Public Debt and Privatisation Committee on November 18, 2025, that the debt portfolio had hit KSh 11.7 trillion during the 2024/25 financial year. This represents a significant increase from the KSh 10.6 trillion recorded in the previous fiscal year.

Debt-to-GDP Ratio Exceeds Recommended Thresholds

Kenya's debt-to-GDP ratio stood at 67.3% as of September 2025, according to The Kenyan Wall Street. This is significantly above the 50% threshold recommended for developing economies by the International Monetary Fund (IMF). The Controller of Budget's report indicated a similar ratio of 67.8%. These figures underscore the mounting pressure on the country's finances, with a substantial portion of revenue being allocated to debt repayment.

International financial bodies have revised Kenya's economic growth forecasts downwards, citing the high debt burden. In October 2025, the IMF projected a slower growth of 4.8% for 2025. The World Bank also cut its 2025 growth forecast for Kenya to 4.5% in May 2025, expressing concerns over high debt risks and a decline in private sector credit. The Central Bank of Kenya (CBK) has also adjusted its own forecast, projecting a 5.2% growth for 2025 in a revision made in June 2025.

Concerns Over 'Off-Book' Borrowing and Securitization

Beyond the official figures, MP Nyoro raised alarms over what he termed "illegal borrowing" and "off the books" loans. He specifically pointed to the securitization of future revenue streams, such as the fuel levy, to secure loans without, he alleged, proper transparency. "The government is also for the first time borrowing off the books without transparency," Nyoro stated in a post on X (formerly Twitter) on October 24, 2025.

He cited the KSh 45 billion Talanta Stadium project as an example of such financing, claiming the loan, secured against the Sports Fund, could cost taxpayers KSh 100 billion in interest over 15 years. Nyoro argued that this practice limits future financial flexibility and called for the Treasury to maintain a single, transparent record of all national debt.

The High Cost of Servicing Debt

The rising debt has led to soaring servicing costs, which are consuming a significant portion of the country's revenue. According to a July 2025 report from Moody's, Kenya spends a third of its government revenue on interest payments alone. For the financial year ending June 30, 2025, Kenya's total debt service obligation was KSh 1.85 trillion, as reported by the UN Conference on Trade and Development (UNCTAD). This comprises KSh 843.4 billion in principal repayments (redemption) and KSh 1.1 trillion in interest payments.

The government's budget for the 2025/2026 fiscal year, set at KSh 4.3 trillion, projects a fiscal deficit of 4.8% of GDP. To finance this gap, the Treasury plans to borrow KSh 635.5 billion from the domestic market and KSh 287.7 billion from external sources. This strategy reflects a shift towards domestic borrowing as global credit markets tighten. Finance Ministry Principal Secretary Chris Kiptoo affirmed the government's focus on fiscal sustainability during a budget preparation event on November 19, 2025, even as spending pressures mount.