MP Ndindi Nyoro warns Kenya on the brink of defaulting as debt burden hits Ksh.11 trillion

Speaking at the Institute of Public Finance annual budget review, the former Budget and Appropriations Committee Chair said the country’s public debt—currently estimated at Ksh.11 trillion—is worrying. He warned that any attempts by the government to renegotiate existing debt could prove to be even more catastrophic.

Over the last twelve years, the country’s debt has grown from just under Ksh.2 trillion to Ksh.11 trillion, according to government estimates.

Data from the Central Bank of Kenya shows that as of December 2024, Kenya owed its lenders Ksh.10.9 trillion—of which nearly 54 percent was owed to local lenders, while 46 percent was external.

During President Ruto’s tenure, the public debt has increased by more than Ksh.2 trillion in absolute terms, from Ksh.8.7 trillion.

As the National Treasury prepares the budget estimates for the financial year 2025/2026, there are plans to spend up to Ksh.4.2 trillion. Out of this, an estimated Ksh.1 trillion will be required to finance interest payments on debt.

MP Nyoro says that, based on current trends, Ksh.750 billion will go towards servicing domestic debt, while Ksh.200 billion will be spent on external debt repayments.

He cautions that the country is edging toward defaulting on its debt repayments, as indicated by Kenya’s mission to China, which is seeking debt restructuring.

President William Ruto is set to travel to China as part of a Kenyan delegation, with speculation rife that discussions about the country’s debt challenges could take place. The former Budget and Appropriations Chair warned that any attempt to alter Kenya's debt terms could raise concerns within the international financial system.

“Any indication that we are going to default or are unable to service our loans is more catastrophic to our economy,” Nyoro added.

Until February this year, Nyoro chaired the Budget and Appropriations Committee, where he defended the government’s policies aimed at containing the budget deficits, which remain a major concern due to the need for continued borrowing.

Nyoro also said the increase in taxes since 2022 has had a negative impact on the economy.

“Increasing taxes to get more revenue is a fallacy. By increasing taxes, you distort economic decisions. If I was planning to buy a car, I would withhold that decision because the government is coming for my money. That means even the little revenue you would have gotten—you won’t get it,” said Nyoro.