THE INCREASING DEBT FOR KENYANS NOW STANDS AT 1 TRILLION

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On 22nd February 2019, the Controller of Budget (COB) raised concern over country’s increase in public debt.  The treasury projected expenditure of Ksh 1.1 trillion on debt repayment in the 2019/20 financial year which started in July 2019.In his presentation to the Senate Finance Committee on 21st February 2019, the director of research and planning at the Office of the COB Joshua Musimi said, “With Kshs 1.1 trillion going into service debt, it will leave Treasury with less than Kshs 700 billion for expenditure which is unsustainable. Senate should ask the Exchequer to rethink its fiscal policy to avert a crisis.” Kenya’s expensive debt from foreign commercial bank had already hit Kshs 1.09 trillion by the end of June. Mr Rotich proposed a cutback on foreign loans to ease repayment fears. Other political analysts expressed their worry about the country’s public debt in comparison to its national income. According to research by Worldometres Kenya has a population of 52 million, implying that every Kenyan owes about USD $965 and produces $1169 a year.

This information comes even as the treasury reopens its September T-bond issue targeting to get Kshs 30billion from the market. The initial sale last month raised Ksh32.6billion, for 15 year bonds that sought to raise Ksh50billion.

The tap sale which will be offering the same interest rate as that of accepted bids in the initial sale will run until Thursday. In a notice published on 31st September 2019, the bonds selling agent from The Central Bank of Kenya said that the period of sale will be 1st October until the 3rd of October 2019, this Thursday, or upon attainment of a quantum.

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