2/ So, how did we end up here, with Kshs. 1.9 Trillion of our budget going to public debt? 🤔
It all starts with a
#budgetdeficit, when the government spends more than it collects in revenue.
To fill this gap, the government borrows. But how and from where?
👇 A breakdown:
🔹 1.
#DomesticPublicDebtObligation (Kshs. 1.31 Trillion)
That’s about 69% of the debt cost in FY 2025/26.
📌 Borrowed from local banks, pension funds, insurance companies, and investors in Treasury Bills (short-term) & Bonds (long-term).
📊 Breakdown:
Kshs. 851.42B – Interest payments
Kshs. 463.51B – Debt redemption (repaying principal)
🔸 2.
#ExternalPublicDebtObligation (Kshs. 586.45 Billion)
That’s around 31% of the debt cost.
📌 Borrowed from outside Kenya: World Bank, IMF, China, AfDB, or through Eurobonds.
📊 Breakdown:
Kshs. 246.26B – Interest
Kshs. 340.19B – Debt redemption (Principal payment)
💵 External loans are in USD, and must be repaid in USD. This is risky! Every time the Kenya Shilling weakens, we must pay more to meet the same obligations.
📌 Some loans are
#concessional: low interest and long repayment periods.
Others are
#non-concessional (commercial loans), with high interest and short terms = more pressure on our budget.
🔥 In total, debt repayments in FY 2025/26 will cost Kshs. 1.9 Trillion. That’s 44.4% of the entire Kshs. 4.3 Trillion national budget.
Let that sink in ‼️
Almost half the budget is going to creditors.
Not services. Not development. Not the people.
🚨 NB: The
#PublicDebtObligation (Interest and redemption) should not be confused with what the government should borrow to finance the
#deficit for the incoming FY 2025/26!
#BTG #BudgetTalkGlobal #KenyaBudget #PublicDebt #DebtCrisis #PFMKE #KeBudget2025 #FiscalJustice #BudgetEstimates2025 #Tech4Budgets