Kenya’s external public debt rises by KSh500 billion on weaker shilling

  • Kenya’s external debt for the financial year 2021/2022 has increased due to the depreciation of the shilling against the dollar
  • The country paid over KSh 4.2 trillion as the shilling depreciated from KSh 107 units in 2021 to KSh 117 units in 2022
  • Most of the external debt was paid to commercial banks, bilateral and multilateral institutions

Kenya’s external public debt has increased by almost KSh 500 billion due to the weakening of the shilling against the dollar.

Treasury CS Ukur Yatani. Ukur Yatani.
Source: Twitter

A report released by the National Treasury in August 2022 showed that the external debt for the financial year 2021/22 stood at $35.3 billion (KSh 4.2 trillion).

External creditors

The Quarterly Economic and Fiscal Review reported that Kenyans paid off KShs 305 billion in foreign debts during the year under review.

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About 60.4% (KShs. 184.5 billion) of the cumulative value was paid in principal, while KShs. 120.8 billion (39.6%) was paid in interest.

Depreciation in shillings

The depreciation of the shilling by 9.3%, from 107.85 in 2021 to 117.8 in June 2022, saw the external debt burden increase by KSh 461 billion

The money went to external multilaterals at 46.3%, bilaterals at 26.6%, commercial banks at 26.8% and suppliers at 0.3%.

“…the stock of external public debt of multilateral institutions recorded an increase in the period ending June 2022, compared to the previous year,” the report reads in part.

The cumulative total external debt payment included commercial payments at 49.9%, bilateral payments at 33.4% and multilateral payments at 16.7% for the same year under review.

Gross public debt

This saw gross government debt increase by KSh882.5 billion to reach KSh8,579.1 billion for the year ending June 30. reported that President Uhuru Kenyatta’s government left behind KSh504.7 billion in unpaid bills for the financial year ending June 2022.

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This is a 40.4% increase from the KSh359.5 billion of unpaid bills reported in the fiscal year ending June 2021.

Of the KSh504.7 billion, KSh448.6 billion (88.9%) is due to state corporations and a further KSh56.1 billion (12.1%) to ministries and other government entities.

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Shirlene J. Manley