How Kenya’s debt compares to other African nations

Trends in the growth of Kenya’s public debt over the past decade compare fairly with its peers in the East Africa region and the continent in general.

Data on African states’ borrowing habits since 2012 show that despite having grown tremendously between 2012 and 2020, Kenya’s is not the only government that has been on a borrowing spree, risking to stifle the Gross Domestic Product (GDP), even as credit rating points remain low.

By June last year, Kenya’s public debt as a share of GDP was 65.6 per cent, up from 62.4 per cent in June 2019. By November, when the country had a debt of Sh7.2 trillion, the debt had grown to 69 per cent of the GDP and the country’s credit rating - the assessment of ability to pay – currently stands at 33 points.

By 2012, when retired President Mwai Kibaki was on the verge of exiting from the country’s leadership, Kenya’s public debt as a share of GDP was 38.2 per cent. This figure has been growing ever since.

But it is not only Kenya’s public debt that has been growing over the past decade.

Other neighbouring countries and some in the west, north and south of the continent have also witnessed the burden of borrowing take a toll on their fiscal space.

An analysis on Kenya’s neighbours in the Eastern African region shows public debt in some of these countries has grown by figures that are far larger than Kenya’s and credit ratings in some of them are lower. But most of them have public debts as a share of GDP still lower than Kenya, according to data sourced from Trading Economics website.

For instance, in Ethiopia, the debts have increased from 27.4 per cent as a share of GDP in 2012 to 59 per cent by June last year, meaning that debts are eating up to 32 per cent of the country’s GDP more than they did nine years ago. The country’s credit rating is also lower than Kenya’s, at 25 points. Ethiopia borrowed the highest amounts between 2017 and 2018, raising the country’s public debt as a share of GDP from 35.6 to 60 per cent.

In Rwanda, the debts have moved from 20 per cent as a share of GDP in 2012 to 51.4 per cent by June 2019 (the latest figures), while the country’s credit rating – like Kenya’s – stands at 33 points.

Closer in Uganda, President Yoweri Museveni’s administration had borrowed up to 38.2 per cent of the landlocked country’s GDP by June 2019, up from 24.5 per cent in 2012.

Uganda’s credit rating lags behind Kenya at 31 points, although Tanzania, which has been cautious in borrowing since President John Pombe Magufuli – who died last month – took office in 2015, has a healthier credit rating of 35 points. Tanzania’s public debt as a share of GDP, however, increased from 29.2 per cent in 2012 to 37.8 per cent by 2019.

In the south of the continent, South Africa’s public debt as a share of GDP has moved from 41 per cent in 2012 to 83 per cent by June last year. The country borrowed the most last year when the world was facing the Covid-19 pandemic, increasing the share of public debt to GDP from 62.2 per cent in 2019. South Africa has a total public debt of Sh8.6 trillion ($78,295 million) and a better credit rating of 45 points.

Up north, Egypt has also made notable borrowings over the past decade to have its public debt equal to 90.2 per cent of its GDP by June 2019, up from 80.3 per cent in 2012. At 30 points, the land of Pharaohs has a lower credit rating than Kenya.

Egypt has, however, been making notable strides in cutting its borrowing appetite in recent years. Between 2017 and 2018, it reduced its public debt as a share of GDP from 108 to 90.5 per cent and continued to reduce it further in 2019.

Bordering the Atlantic Ocean on the west, Nigeria’s Sh9.5 trillion public debt is still sustainable, taking a share of 34.98 per cent of its GDP. In 2012, Africa’s most populous country’s public debt as a share of GDP was 17.6 per cent, showing that it has also increased its borrowing over the past decade, while its credit rating – at 28 points – is lower than Kenya’s.

Countries in Central Africa appear to be the most affected by debts, either because debts take a huge share of GDP or their credit ratings are low. Angola, for instance, had a public debt as a share of GDP at 120 per cent by June last year, up from a mere 29.5 per cent in 2012 and its credit rating at a red of 21 points.

And although countries such as the Central African Republic (CAR) and Cameroon have fairly lower public debts as a share of GDP at 47.2 and 42.7 per cent respectively, their credit ratings are still low at 15 and 28 points respectively. Cameroon’s public debt as a share of GDP has risen from 18.23 per cent in 2012.

Libya had the lowest public debt as a share of GDP at -0.2 per cent by June 2019, but was also among the countries with the lowest credit rating of 15 points.

With 257 per cent public debt as a share of GDP by last year, Sudan has the worst debt levels in Africa. Debt levels in the country faced by political and economic instability have been worsening over the past decade and in one year alone, the country’s public debts increased sharply from 202 per cent share of GDP in 2019. It is ranked among countries with the lowest credit ratings at 15 points.

As the country faced civil strife between 2016 and 2017, its public debt almost tripled, moving from 58.6 per cent of GDP to 159.2 per cent. In 2012, Sudan’s public debt as a share of GDP was 77.8 per cent.

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