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Kenya’s external debt for the period ended June 2023 rose to Sh5.3 trillion from Sh4.2 trillion recorded at the end of June 2022, the latest report by the Kenya National Bureau of Statistics (KNBS) says.

The KNBS Director General Macdonald Obudho attributed the rise to increased loan disbursements and valuation changes.

Obudho said the stock of loans from multilateral sources also increased by 38 per cent in the review quarter compared to the corresponding period in 2022 and accounted for 62.1 per cent of the outstanding stock of external loans at the end of June 2023.

The statistics office said the stock of loans from bilateral sources rose from Sh1.1 trillion as of June, 2022 to Sh1.3 trillion by the end of June 2023, accounting for 29.4 per cent of the stock of external loans.

China was the leading source of bilateral loans at the end of June, 2023. France, Japan, Italy and Germany jointly accounted for 24 per cent of the stock of bilateral loans during the period under review.

The stock of debt securities also rose by 18.4 per cent at the end of June, 2023, with the International Sovereign Bond accounting for 18.8 per cent of the outstanding stock of external liabilities at Sh997.7 billion, according to the report.

According to KNBS statistics, The current account deficit narrowed from KSh 206.2 billion in the second quarter of 2022 to KSh 138.7 billion in the second quarter of 2023.

However, the balance on merchandise trade recorded an improvement from a deficit of Sh365.8 billion in the second quarter of 2022 to a deficit of Sh343.2 billion in the corresponding quarter of 2023.
“This was attributable to a 9.6 per cent increase in exports of goods, coupled with a slight reduction in expenditure on imported commodities during the quarter under review,” the report states..

Tea and horticultural commodities were the key drivers in the growth of exports. The surplus from exports of services rose by 25.6 per cent to Sh35.4 billion in the second quarter of 2023.

Increased exports of services in the travel, transport, financial, telecommunication and government goods and services also resulted in favourable performance in international trade in services

Diaspora remittances rose from Sh120.3 billion in the second quarter of 2022 to Sh140.5 billion, boosting the surplus in the secondary income account by 28.2 per cent to Sh234.5 billion in the second quarter of 2023.

Net inflows rose from a surplus of Sh199.8 billion in the second quarter of 2022 to a surplus of Sh321.4b in the same quarter of 2023 on account of increased disbursements to the general government from multilateral sources.