Ndindi Nyoro sounds alarm on Kenya’s spiralling debt

 Nyoro said the current debt stock stands at about Sh13 trillion, noting that the figure reflects a growing pressure on public finances.

“So, currently the debt in the country starts at Sh13 trillion,” he said.

He pointed to the budget deficit as a key driver of the borrowing trend, noting that the figures presented at the beginning of the financial year may not fully reflect end-year adjustments.

“And we are borrowing now, currently, what is called a fiscal deficit of 5.3, 5.5% in this budget,” he said.

Nyoro argued that the deficit outlook often changes as the financial year progresses, particularly when supplementary budgets are introduced.

“But that is actually an understatement. Because we are starting the budget,” he said.

“You look at the deficit when you are ending the year, not when you are starting."

He said additional borrowing is often approved through supplementary budgets, which can increase the overall financing requirement beyond initial projections.

“And you can write somewhere in reference. When we will have a supplementary budget, we will likely be amending to even borrow further,” Nyoro said.

The MP projected that total borrowing could rise significantly by the end of the financial year.

He also highlighted the scale of daily borrowing when refinancing is factored in.

“And that is why, in a day, we are likely to be borrowing around Sh4 billion on net terms,” he said, explaining that net borrowing accounts for new loans taken after repaying existing debt.

“Net terms meaning discounting the money we borrowed to pay the previous loan. It's called refinancing,” Mbadi said.

Nyoro urged caution over the pace of debt accumulation, warning that it could become increasingly difficult to manage if not addressed early.

“So we need to get very serious on this matter of debt,” he said.

The MP described the potential consequences of unchecked borrowing as severe and long-lasting.

“Because once we get into a cliff and we slide, to get out of that takes many years,” he said.

Such a scenario could have wide-ranging economic and social impacts, affecting different groups across the country, Nyoro said.

“And it also is associated with a lot of pain. Pain of people taking haircuts. Pain of pensioners losing out their money. Pain of a decelerating economy. Pain of a scattering exit rate. Pain in all parameters,” he said.

He emphasised the importance of addressing the issue while there is still room to adjust fiscal direction.

“And since we are in a situation where we can still retrospect and stop digging deeper, I would recommend highly that we do that as a country,” he said.

Nyoro's remarks come amid continued debate over Kenya’s debt levels, fiscal deficit, and the sustainability of public borrowing.