Kenya’s debt burden a ticking time bomb, MP Ndindi Nyoro warns

Kiharu MP Ndindi Nyoro at the 42nd ICPAK annual seminar in Mombasa on Thursday / BRIAN OTIENO

Kiharu MP Ndindi Nyoro has raised concerns over the state of the country’s fiscal policies, alleging the existence of illegal “secret debts” that he says are harmful to the economy.

Nyoro warned that the current debt levels are unsustainable and risk pushing the country to its knees.

He said Kenya is today borrowing Sh3.5 billion every day.

The Kenyan economy is projected to be around USD131 billion (about Sh17.01 trillion) by end of this year, Nyoro said.

The debt in Kenya is Sh12.5 trillion currently.

For the fiscal year 2025/2026, the Kenyan government tabled a fiscal deficit of -4.8 per cent of GDP with a debt-to-GDP ratio of around 68 per cent.

The International Monetary Fund forecasts Kenya's GDP growth to stand at 4.9 per cent in 2026.

Finance PS Chris Kiptoo said the Kenyan government is targeting a fiscal deficit of 4.9 per cent of GDP for fiscal year 2026/2027.

But Nyoro said: “When we talk about the debt to GDP ratio, we must never massage the denominator. It is actually over 70 per cent.”

He spoke during the 42^nd Institute of Certified Public Accountants of Kenya (ICPAK) annual seminar in Mombasa.

He said Kenya needs to be factual over its data.

“When we report figures that has GDP in it, we don’t massage GDP, whether we inflate it or whatever. So that we get the right parameters that we need,” the Kiharu MP said.

He said in 2003, when former president the late Mwai Kibaki took over, the debt in Kenya was Sh600 billion.

“By the time he left, it was around Sh1.8 trillion and therefore President Kibaki borrowed roughly Sh1.2 trillion for the entire 10 years he was president. He was borrowing around Sh100 billion every year,” Nyoro said.

He said when President Uhuru Kenyatta took over in 2013, the debt was Sh1.8 trillion.

In 2022, the public debt was Sh8.7 trillion meaning Uhuru borrowed around Sh7 trillion, roughly around Sh700 billion every year.

“The current administration, when it took over, the debt was Sh8.7 trillion. Now as we talk, the legal debts, because there are others which I’ll talk about, is Sh12.5 trillion,” Nyoro said in Mombasa.

“In that span of less than three years, Kenya has borrowed Sh3.8 trillion. Therefore, Kenya is borrowing Sh1.25 trillion every year. The money Kibaki borrowed in 10 years, we are borrowing every year.”

Nyoro said this translates to Sh3.5 billion borrowed every day, which is not sustainable.

The MP noted there are other secret debts that the government incurs, but labeled in other fancy names like securitization of roads maintenance levy fund, Talanta bond, among many other names.

He said it is important for a country to maintain one book of debt so as to have a clear roadmap of repayment that is transparent and honest

“Kenta must stop borrowing off the book,” he said.

He said beyond the reported debt of Sh12.5 trillion, Kenya has already borrowed an illegal debt of Sh175 billion from the banks.

“And then they are telling the banks they will be collecting fuel levies for the next seven years,” Nyoro revealed.

He said the Talanta bond, used to build the Sh45 billion Talanta Stadium, was taken off the book.

“Now, we’ll be servicing that debt using Sports Fund, every month Sh500 million. In 15 years, a debt of Sh45 billion, Kenya will pay an interest rate of Sh100 billion.

“Therefore the cost of the Talanta Stadium on Ngong road in Nairobi is not Sh45 billion. It is the most expensive stadium in the world. It will be Sh145 billion in the next 15 years,” Nyoro said.

The Kiharu MP said the money that should have been used to build more roads, schools, hospitals, will now be used to service unnecessary debts.

He says this is what makes school capitation less than what it is supposed to be because the money that should be used to fund free education is instead going to service secret debts.

Every secondary school learner should be getting g a capitation of Sh22,040 but they are currently getting Sh16,000.

This denies Kenyan children quality education, which ends up chucking out half-baked learners who cannot be productive in the economy.

And when the economy is not productive, many youth lose jobs and engage in vices like drug abuse and crime, he noted.

Nyoro said servicing of illegal debts, some of which cannot be clearly demonstrated where it has gone, strains the economy.

He said borrowing is not bad in itself, but it should be done in one book.

“This issue was actually discovered this year. Since independence we have never done securitization and those kinds of bonds.

“When we get a squeeze on the normal borrowing, let us not expose Kenya by opening other secret, illegal books of loans,” the Kiharu MP said.

He said the fiscal policy in Kenya has been hijacked by debts.

He said the policy is currently only addressing one issue to the detriment of the others.

“If you look at the interest rate, we keep seeing the CBR coming down. But if you look at the lending to the private sector, it is decimated, either stagnant or going down.

“So, to whose interest is the interest rate in Kenya going down? It is basically because of domestic debt service,” Nyoro said.

He said government now is borrowing more domestically because Kenya does not want to be accountable to the external lenders.

INSTANT ANALYSIS:

As per the latest data from the Central Bank of Kenya (CBK), the total public debt stood at Sh11.5 trillion as of May 2025, compared to Sh10.4 trillion recorded in May 2024, equivalent to an 10.3 per cent increase.