Kenya in its worst period as debt peaks, warns Mbadi

Treasury Cabinet Secretary John Mbadi. [File, Standard]

Treasury Cabinet Secretary John Mbadi has called on Kenyans to take a firm stand against corruption, warning that the country is at a critical economic juncture due to mounting debt.

“All Kenyans must come out to say no to corruption. All, all of us,” said Mbadi on Tuesday, March 25, during the launch of the Anti-Corruption Strategic Guiding Framework for Kenya’s justice sector in Nairobi.

He emphasised that justice is a priority for the government in its fight against corruption.

Mbadi  observed that Kenya’s debt has reached a tipping point, ="https://www.standardmedia.co.ke/business/business/article/2001507732/kenya-braces-for-imf-talks-amid-debt-crisis#:~:text=Kenya's%20public%20debt%20has%20surged,tax%20increases%20and%20expenditure%20cuts.">with about Sh10 trillion in external and domestic obligations.<

“We will be left to look inward, and this is the worst period for Kenya. Some time back, we decided to take loans as a country, and these loans have now reached their peak,” said Mbadi.

The Treasury CS noted that two-thirds of the country’s annual revenue is spent on debt servicing.

“As for our local debts, I won’t discuss them in detail, but we keep retiring them. Regarding external borrowing, we have Sh5.09 trillion in cheap-to-pay loans and an expensive Sh1 trillion loan, which includes a Sh665 billion Chinese loan taken between 2014 and 2019,” he said.

Kenya remains one of the largest recipients of US aid in sub-Saharan Africa, alongside Ethiopia, South Sudan and Nigeria. Most of the assistance is allocated to health and humanitarian efforts, with a focus on HIV/AIDS and malaria response.

At the same time, the European Union remains a key source of humanitarian and development aid to Kenya. The Treasury has been engaging international partners to explore further financial support and sustainable debt management strategies.