In Summary
  • By last year, the government was using over Sh870 billion of its budget to pay debts, up from Sh649 billion in the financial year 2017/18 and Sh417 billion in 2016/17.
  • Kenya’s ability to service its debts as compared to the revenue ratio has been declining since 2017.

Kenya risks defaulting on its debt obligations in a decade if the current appetite for borrowing remains unchecked, a think tank has warned.

Worrying details on the country’s debt have emerged a day after President Uhuru Kenyatta and ODM leader Raila Odinga left the country for China to secure a fresh Sh368 billion loan for expansion of the standard gauge railway (SGR) to Kisumu.

A survey by the Institute of Economic Affairs (IEA) revealed that if the country’s appetite for borrowing continues, it risks defaulting on repayment in 10 years.

The IEA showed a trend where the government has been using more than two thirds of its revenue to cater for recurrent expenditure since 2013, while the amount used to service debts increases every year.

Of the money used to cater for recurrent expenditure by the national government in the financial year 2013/14, 44 per cent was used to service debts.


In 2018/19 that amount rose to 58 per cent, as money used to pay wages shrank by seven per cent.

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