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Jan. 26, 2017, 3:30 am | By CONSTANT MUNDA @mundaconstant
The stock of Kenya's public debt is likely to hit Sh3.77 trillion by end of this financial year on June 30, the National Treasury says in a report to the National Assembly. This is double the Sh1.89 trillion in June 2013 – the year the Jubilee administration took over the reins of power – due to heavy investment in infrastructure development.
This will, however, represent a slower year-on-year growth of 4.4 per cent from Sh3.61 trillion in the year ended June 2016 compared to 26.9 per cent growth last financial year over Sh2.84 trillion in June 2015.
Treasury CS Henry Rotich says in the Annual Public Debt Management Report 2016-17 presented to the National Assembly this week the debt is likely to rise further to Sh5.32 trillion in 2020.
“However, as a proportion of GDP (gross domestic product), public debt is projected to decrease to 50.7 per cent in June 2017 from 54.8 per cent in June 2016, then increase to 53.1 per cent in 2020,” Rotich says. “Kenya's public debt is within sustainable levels over the medium term and well within the 50 per cent limit of GDP in NPV (Net Present Value) terms in line with PFMA (Public Finance Management Act) regulations and the requirements of the East African Community convergence criteria.”
The share of domestic debt was 50.3 per cent in June 2016, the report states, while foreign's accounted for 49.7 per cent.
Government guaranteed debt rose by Sh16.60 billion in the review period to Sh60.53 billion, largely due to Sh8.17 billion and Sh6.24 billion loans from Germany and Japan to KenGen and Kenya Ports Authority, respectively.
About Sh251.44 billion was spent on servicing the existing debt, with about Sh1.05 billion of that being spent on servicing government guaranteed loans, mainly to financially-distressed Tana and Athi River Development Authority and Kenya Broadcasting Corporation.
“As at end of June 2016, the average maturity, grace period and average interest rate on new external loan commitments were 20.3 years, 6.2 years and 2.6 per cent, respectively,” Rotich explains. “Overall, these are favourable borrowing terms in line with government's external debt strategy of contracting loans on highly concessional or soft terms.”
Public debt doubles to Sh3.77tn in five years
The stock of Kenya's public debt is likely to hit Sh3.77 trillion by end of this financial year on June 30, the National Treasury says in a report to the National Assembly. This is double the Sh1.89 trillion in June 2013 – the year the Jubilee administration took over the reins of power – due to heavy investment in infrastructure development.
This will, however, represent a slower year-on-year growth of 4.4 per cent from Sh3.61 trillion in the year ended June 2016 compared to 26.9 per cent growth last financial year over Sh2.84 trillion in June 2015.
Treasury CS Henry Rotich says in the Annual Public Debt Management Report 2016-17 presented to the National Assembly this week the debt is likely to rise further to Sh5.32 trillion in 2020.
“However, as a proportion of GDP (gross domestic product), public debt is projected to decrease to 50.7 per cent in June 2017 from 54.8 per cent in June 2016, then increase to 53.1 per cent in 2020,” Rotich says. “Kenya's public debt is within sustainable levels over the medium term and well within the 50 per cent limit of GDP in NPV (Net Present Value) terms in line with PFMA (Public Finance Management Act) regulations and the requirements of the East African Community convergence criteria.”
The share of domestic debt was 50.3 per cent in June 2016, the report states, while foreign's accounted for 49.7 per cent.
Government guaranteed debt rose by Sh16.60 billion in the review period to Sh60.53 billion, largely due to Sh8.17 billion and Sh6.24 billion loans from Germany and Japan to KenGen and Kenya Ports Authority, respectively.
About Sh251.44 billion was spent on servicing the existing debt, with about Sh1.05 billion of that being spent on servicing government guaranteed loans, mainly to financially-distressed Tana and Athi River Development Authority and Kenya Broadcasting Corporation.
“As at end of June 2016, the average maturity, grace period and average interest rate on new external loan commitments were 20.3 years, 6.2 years and 2.6 per cent, respectively,” Rotich explains. “Overall, these are favourable borrowing terms in line with government's external debt strategy of contracting loans on highly concessional or soft terms.”
Public debt doubles to Sh3.77tn in five years
