Kiharu MP Ndindi Nyoro Schools Government on Budgeting and Debt Crisis
Kiharu Member of Parliament Ndindi Nyoro has raised concerns over Kenya’s mounting public debt, warning that the nation risks defaulting on its financial obligations.
Speaking during the Institute of Public Finance’s annual budget review held on Tuesday, Nyoro noted that Kenya’s debt burden, which has surged to Ksh11 trillion, could place the country among Africa’s debt-defaulter nations if not addressed urgently.
According to data from the Central Bank of Kenya, as of December 2024, the total public debt stood at Ksh10.9 trillion. Of this amount, 54 percent is owed to domestic lenders, while the remaining 46 percent is attributed to external creditors.
Nyoro, the former chair of the National Assembly’s Budget and Appropriations Committee, cautioned that attempts to renegotiate debt could send negative signals to global markets and further destabilise the economy.
“Any indication that we are going to default or are unable to service our loans is more catastrophic to our economy,” he stated, underscoring the serious implications of debt restructuring.
President William Ruto is expected to travel to China, where Kenya’s debt challenges will feature prominently in discussions. This follows a recent mission by Kenyan officials seeking to renegotiate terms of the country’s debt with China.
Nyoro warned that any move to restructure debt could erode confidence among international lenders and financial institutions.
As preparations begin for the 2025/2026 financial year, Nyoro highlighted the government’s increasing dependence on borrowing to finance its budget deficit.
The National Treasury plans to spend Ksh4.2 trillion in the upcoming fiscal year. Out of this, Ksh1 trillion has been allocated for interest payments on public debt.
Specifically, Ksh750 billion will be used to service domestic debt, while Ksh200 billion will be directed towards repaying external obligations.
Nyoro also criticised the government’s tax policy, noting that heightened taxation since 2022 has placed a greater strain on the economy.
“Increasing taxes to get more revenue is a fallacy. By increasing taxes, you distort economic decisions,” he remarked, pointing to the negative effects on consumer behaviour and overall economic growth.
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Kiharu MP Ndindi Nyoro Schools Government on Budgeting and Debt Crisis
