CoB Nyakang'o says Kenya's debt stands at Ksh.12.8 trillion, 71% of revenue servicing loans

Controller of Budget (CoB) Margaret Nyakang'o has warned that the government continues to borrow beyond approved ceilings, raising concerns over the country's fiscal sustainability. 

Appearing before the National Assembly's Public Petitions Committee on Tuesday, Nyakang'o said Kenya's public debt has now reached Ksh.12.82 trillion.

She also accused counties of diverting funds approved by her office to projects and expenditures that were not originally requisitioned.

According to the CoB, the situation has created a vicious cycle where the government is forced to continue borrowing simply to sustain its operations.

"The total public debt stands at Ksh.12.82 trillion. 60 per cent is domestic and 40 per cent is external. The impact is that 71 per cent of the revenue collected goes to loan repayment, leaving us with only 29 per cent to finance government operations," she stated. 

"We cannot survive. The impact is that we will continue borrowing for us to survive. We can mitigate it, but how we do that is upon us to figure out."

On transparency, Nyakang'o defended her office's efforts to make budget information accessible to the public, saying expenditure reports are regularly published online for scrutiny.

"We publish and publicise. We put them on websites in a downloadable format, and the media always download and analyse them. I thank the media for supporting me. I agree that we need to increase our digital presence and become more active to inform our young people as well," she said.

She added that her office remains focused on strengthening public financial management, noting that improving accountability is a continuous process.

"Success is not a destination; it is a journey. We have focused on how we are going to improve things," she remarked.

Nyakang'o also raised concerns over the persistent accumulation of pending bills by county governments, accusing some counties of diverting funds released to settle suppliers.

"They let me down. When releasing the funds, they go and do different things with the money. The Central Bank and my office are working on a formula that I hope will work," she noted. 

She noted that her office continues to receive numerous complaints from suppliers who remain unpaid despite counties requesting and receiving funds meant to settle those obligations.

"We are handling a lot of complaints from suppliers who have not been paid. Their details are used to source funds, but when the funds are released, they are redirected by counties to do something else," she told the committee.

The Controller of Budget warned that the practice of rolling over pending bills from one financial year to another must come to an end, saying stricter oversight will be implemented ahead of the next general election.

"Pending bills are being left year after year. This year is the final year before the next administration comes in, and we will be very strict on pending bills," Nyakang'o said.

She commended counties that have improved their financial management, singling out Makueni County for receiving a clean audit report, while noting that others had made gradual progress.

"Makueni last year got a clean report. Some improved from very bad to bad," she observed.

Nyakang'o reiterated that funds approved to pay suppliers must reach their intended beneficiaries, lamenting that she often has little control once the money leaves her office.

"We want that when we release money for suppliers, they are paid. I am becoming helpless. Counties requisition money for a particular matter; when I approve and release the funds, they are channelled to other uses not authorised. They are budgeted for, but when the money is released, it is taken to another use," she said.