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Kenya borrowed the largest amount of money in a single year during President William Ruto’s first year in office, pushing the debt levels past the ceiling amid shortfalls in tax collections and increased repayment obligations.
Gross debt stock climbed Ksh1,56 trillion (US$10,8 billion) for the financial year ended June, fresh data released by the Treasury shows, breaching the Ksh10 trillion (US$69,52 billion) mark by Ksh189,53 billion (US$1,32 billion).
Kenya ended the last financial year in June with a gross total debt load of Ksh10,19 trillion (US$70,84 billion), a growth of 18.08 percent over Ksh8,63 trillion (US$59,99 billion) a year ago, which was the last full fiscal year for former president Uhuru Kenyatta.
Lawmakers in June voted to convert the numerical debt ceiling to an anchor of 55 percent of gross domestic product (GDP), with the Treasury given five years to comply.
The jump in gross debt came in a fiscal year Dr Ruto, who was in charge for nine of the 12 months under review, made it clear his administration would cut borrowing.
Nearly Ksh1,43 trillion (US$9,94 billion), or 91,52 percent, of the new gross debt, was contracted in the last nine months of the year under review, according to the Treasury data.
Dr Ruto, who partly rode to power on a pledge to make debt a “last resort” in raising funds to plug holes in the budget, had pledged not to make the nation “slaves of debt from any place or any country”.
He vowed to pursue policies, which enhance tax compliance levels and grow national savings from a measly “seven” percent of GDP towards 30 percent envisioned in Kenya’s long-term development blueprint, Vision 2030. -The East African
Online Reporter