Kenya Trapped in Debt Spiral as 70% of Revenue Goes to Loan Repayment – Report Warns of Fiscal Meltdown
Kenya’s debt burden has reached alarming levels, with a new Okoa Uchumi public debt report revealing that 70% of all government revenue is now being used to service debt. This leaves only Ksh3 out of every Ksh10 collected for running the country, crippling essential services and development projects.
The report shows that Kenya’s public debt has climbed to Ksh11.81 trillion, split between Ksh6.3 trillion in domestic borrowing and Ksh5.48 trillion in external loans. Debt servicing is now crowding out funding for crucial sectors such as health, education, and infrastructure.
“Kenya is already in a debt crisis,” warned Alexander Riithi, Head of Programs at The Institute for Social Accountability (TISA). “Domestic debt has overtaken foreign debt and is more prone to misuse. Unlike external loans, which must be accounted for, domestic borrowing is far less transparent and vulnerable to abuse.”
The report further notes that the rising debt burden is worsening inequality and economic hardship. Unemployment now stands at 30%, and public hospitals continue to struggle with funding shortages, while corruption remains rampant.
“We have an education system that hasn’t been tested, and Kenyans are telling us the health sector has become a killing field,” Riithi said during the report launch.
The Okoa Uchumi coalition is now pushing for radical financial reforms, including:
- A ban on new IMF and World Bank loans
- Abolition of unapproved supplementary budgets
- Full disclosure of all government borrowing
- Reform of the National Government Constituency Development Fund (NG-CDF)
Saboti MP Caleb Amisi echoed the report’s concerns, saying: “We must free ourselves from the economic chains of the World Bank and IMF. These institutions were not designed for Africa’s development.”
The report warns that without urgent reforms, Kenya risks sliding into a permanent and irreversible debt trap, with future generations forced to shoulder the consequences.