Mbadi urges patience as Kenya tries to pull itself out of debt hole

Treasury and Economic Planning Cabinet Secretary John Mbadi says the country will not clear or settle its current debts fully until 2034. According to the CS, this long road to debt recovery means Kenyans will continue to face tough economic times.

“We are urging patience and perseverance from the citizens as we work to settle these costly debts incrementally,’’ explained Mbadi.

Since the government first opted for the Eurobond in 2014, the nation’s borrowing habits have led to a significant rise in public debt, causing major strain on the economy.

Mbadi’s statement paints a clear picture of the challenges ahead, urging Kenyans to brace themselves for continued sacrifice as the country works to manage its growing debt obligations.

He was speaking during a function at Chiga in the periphery of Kisumu City at the weekend.

The impact of the mounting debt on Kenya’s economy is already being felt in various sectors. Public spending on essential services like health, education, and infrastructure development has been squeezed to accommodate debt repayments.

While the government has prioritised large-scale infrastructure projects such as the Standard Gauge Railway (SGR), the benefits of these investments have often been questioned due to delays and cost overruns.

The rising debt has also contributed to an unsustainable fiscal deficit, with the government relying on domestic and international borrowing to meet its obligations. Last week, the Treasury paid Sh70 billion on a reducing balance as they work on repaying other pending debts according to mutually binding agreements signed by the government of Kenya.

While the journey to debt recovery is challenging, Mbadi explained that the government is committed to ensuring that such debt distress does not recur.

Future measures, including capping the debt ceiling to tame excessive borrowing, are planned to stabilise the economy and avoid repeating these financial hardships. “The resilience and patience of the Kenyan people will be crucial in navigating this period of economic recovery and future growth,’’ Mbadi observed. He recalled that since Kenya opted for its first Eurobond in 2014, the nation’s debt burden has continued to swell, yet when he was an MP, they reminded the state against excessive borrowing.

Mbadi outlined a series of repayments that have been scheduled to manage the debt load. By 2027, Kenya is expected to repay $900 million (approximately Sh130.5 billion).

This will be followed by a $1.2 billion payment in 2029 (around Sh174 billion), $1.5 billion in 2031 (about Sh217.5 billion), $1 billion by 2034 (about Sh145 billion).

The cumulative repayment will total an astounding Sh667 billion but there are other external and domestic debts he didn’t disclose in public which they are also due to settle.