Kenya’s Debt Crisis Uncovered

Imagine waking up one day to discover that your country owes over $101 billion or 13 trillion shillings in debt, but a significant portion of that money was borrowed illegally and can't be accounted for. That's exactly the situation Kenya finds itself in according to a groundbreaking petition filed in Kenya's High Court. Five petitioners, led by Senator Okiya Omtatah Okoiti, have brought a case that threatens to upend Kenya's financial system by challenging the legitimacy of a staggering amount of public debt: Ksh 13.1 trillion (approximately USD 101 billion).

Now let's explore this petition in a simple data driven approach.

According to the Central Bank of Kenya’s Weekly Bulletin dated 27th December 2024, the total outstanding public debt was Kshs10,790,080,000,000, comprising Kshs 5.6 trillion domestic and Kshs5.188 trillion external debts.

What Is "Odious Debt"?

Before diving into the numbers, let's understand a key concept: "odious debt."

Odious debt refers to loans incurred by government officials outside the law (without proper approval) and/or for their own benefit rather than the public good. According to this legal doctrine, a country shouldn't be obligated to repay debt that wasn't used to benefit its citizens.

The petitioners argue that Kenyan officials borrowed billions without proper parliamentary approval and that the money vanished without funding any legitimate development projects.

The Shocking Numbers

Let's break down what the petition reveals about Kenya’s borrowing between 2014 and 2025. During this period, the country actually borrowed Ksh 9.74 trillion, while only Ksh 2.79 trillion was legally authorized. This leaves an alarming Ksh 6.95 trillion as unauthorized borrowing, raising critical questions about fiscal accountability, oversight, and compliance with legal debt limits.

New crew, same circus ?

During the Jubilee regime (2014–2022) under former President Uhuru Kenyatta, the government borrowed a total of Ksh 6.61 trillion. Out of this, only Ksh 2.00 trillion was authorized, while a staggering Ksh 4.61 trillion was unauthorized.

In just 2.5 years under the Kenya Kwanza regime (2022–present) led by President William Ruto, the government has borrowed Ksh 3.14 trillion. Of this, only Ksh 884.38 billion was authorized, with Ksh 2.25 trillion classified as unauthorized.

This borrowing pattern raises serious concerns about debt transparency and adherence to legal borrowing limits across both administrations.

"Since Section 15(2)(c) of the PFMA mandates national borrowings be used solely for development, let’s explore the development mystery."

The Development Mystery

The petition further reveals a troubling financial gap in Kenya's development funding. Under Section 15(2)(c) of the PFMA, which mandates national borrowings be used exclusively for development rather than recurrent expenditure, Kenya allegedly invested Ksh 22.05 trillion (comprising Ksh 17.34 trillion in loans plus Ksh 4.71 trillion in tax revenue) for development projects from 2014-2025.

This averages Ksh 2.2 trillion annually. However, Appropriation Acts from this period show only Ksh 0.75 trillion allocated yearly for development, leaving Ksh 1.45 trillion unaccounted for each year. Even more concerning, Controller of Budget reports indicate actual development spending averaged just Ksh 0.506 trillion annually, meaning approximately Ksh 16.94 trillion over the ten-year period cannot be accounted for.

The Burden of Odious Debt on Kenyan Taxpayers

Most of Kenya’s public debt is paid using taxes collected from citizens. Over the past three years, the government raised an average of Kshs 2.2 trillion per year in taxes.

In the 2024/2025 budget, Kshs 1.94 trillion—about 86% of that tax revenue—was set aside just to repay public debt. This includes both the original loan amounts and the interest.

Given, that 71% of this debt is considered odious—meaning it was borrowed irresponsibly or used poorly. This means 82% of the taxes Kenyans pay are going toward debt that likely brought little benefit to the public.

Note: Figures are drawn from the petition and sourced from budget books, revenue statements, public debt reports, and Treasury documents, compared against Appropriation Acts and petitioners’ simple calculations.