Kenya to spend 40pc of tax revenue on servicing public debt

What you need to know:

  • The repayment bill represents a 38.5 per cent jump from Sh446.4 billion spent on public debt this year compared to a projected 12 per cent growth in tax collection, which is a key indicator of the country’s ability to repay. 
  • The Jubilee government has accelerated borrowing in the past four years to build a modern railway, new roads and electricity plants, but the rate of tax collection has not matched new debt uptake.
  • The huge increase means that taxpayers will now have to dig deeper into their pockets in the coming years to pay for the growing debt burden.
  • Debt repayment remains the Treasury’s biggest budget item compared to essential expenditure lines like education and health.

Kenya’s annual debt repayment is set to hit Sh618.5 billion next year, which will see the Treasury spend an estimated Sh40 out of every Sh100 collected from taxpayers on servicing the ballooning loans.

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