Kalonzo urges debt renegotiation, decries shoddy deals
By Aloys Michael, June 30, 2025Wiper Party leader Kalonzo Musyoka has called on the government to urgently renegotiate Kenya’s ballooning debt and abandon what he described as shoddy deals with the Adani Group.
Speaking on Monday, June 30, 2025, on Kameme TV, he warned that rising public debt is stifling development and fueling corruption.
“Our country is overburdened,” Kalonzo announced, emphasising that the weight of debt is undermining essential services and social progress. He called for decisive action to relieve future generations of unsustainable financial obligations.
He pointed to the controversial Adani agreements — including airport management and power transmission deals — as prime examples of questionable arrangements that lack transparency.
“Why would people want to go to leadership and gain the whole world and lose their soul?” he asked. “We rejected Adani airport deals and they gave up. We are still waiting to see whether they have withdrawn the Adani deal altogether. They took over the energy sector.”
He warned that such opaque arrangements pave the way for budgeted corruption and enrich a select few at the expense of millions.
“These are people who are talking of billions of shillings yet our people are dying of hunger,” he said, accusing the government of prioritising elite profit over citizens’ welfare.
Kalonzo linked the debt crisis directly to corruption, describing a vicious cycle: borrowing fuelled by hidden deals, which in turn creates conditions for misuse of funds and stunted development. He called the current situation budgeted corruption and expressed grave concern over the impact on education, healthcare, and infrastructure.
He proposed a bold remedy: renegotiating debt terms with creditors and withdrawing from any dubious arrangements, starting with the Adani deals.
“Our debt is impeding development. The country needs to renegotiate its debt and do away with shoddy deals such as the Adani ones,” he warned.
Kalonzo asserted that Kenya cannot prosper until its debt is sustainable and public contracts are transparent. His message resonated with a growing public concern over rising borrowing costs and the integrity of major infrastructure partnerships.
The public debt
Kenya’s public debt remains at high risk of distress, with interest payments absorbing about a third of tax revenue. Reforms to strengthen fiscal sustainability equitably while promoting inclusive growth and jobs are critical to reviving a slowing economy and a weak labour market.
According to the latest World Bank Kenya Economic update: Special Focus on Poverty and Distribution Impacts of Fiscal Policy in Kenya, some macroeconomic indicators have improved since 2024—including declining inflation, a stabilized exchange rate, and stronger international reserves—but the overall pace of economic growth has slowed. Kenya’s real GDP is expected to pick up gradually in the medium term, with growth projected to increase from 4.5 per cent in 2025 to about 5.0 per cent in 2026–27.
The economic slowdown stemmed from multiple challenges including floods, high interest rates, and subdued business sentiment following protests and reduced development spending. Despite resilient agriculture, strong remittance inflows, and a rebound in services, growth was further dampened by weak industrial activity, sluggish private consumption, and policy uncertainty that constrained investment and formal employment growth.
Kenya’s current account deficit narrowed to 3.1 per cent of GDP in the 12 months to February 2025, supported by a rebound in exports—particularly agricultural goods and re-exports—and strong remittance growth of 19 per cent. However, tradable sectors underperformed slightly, with tea and manufactured exports declining as a share of GDP, and services exports weakening due to falling travel receipts.
“Despite improvements in Kenya’s macroeconomic indicators, the country continues to face structural challenges, including insufficient job creation and low wages, especially among the youth,” reads the report.
The report said revenue collections have been underperforming, and more efficient revenue and expenditure policy are needed, together with faster arrears verification and repayment in line with Kenya’s debt strategy.