Who Got Us Here, and Who Will Get Us Out? Kenya’s Debt Dilemma

Kenya’s public debt has ballooned over the past two decades, driven by a blend of ambitious projects, economic challenges, and rising interest rates. Each of the last three administrations—Kibaki, Kenyatta, and now Ruto—has shaped the country’s debt landscape in unique ways, leaving Kenya at a critical juncture. As debt grows, so do the questions about Kenya’s financial sustainability and the burden on future generations.

The Kibaki Era (2003-2013): Laying the Groundwork with Caution

When Mwai Kibaki assumed office Kenya’s debt was around KSh 0.71 trillion. His administration focused on stabilizing the economy, reducing dependency on foreign aid, and cautiously borrowing to support key social and infrastructure programs. By the end of his tenure in 2013, public debt had reached about KSh 2.3 trillion.

Kibaki’s cautious approach laid a solid foundation for economic growth, achieving development without overwhelming debt. This period saw Kenya’s economy expand while still maintaining a manageable debt burden, a balance that would soon shift.

The Kenyatta Era (2013-2022): Ambition Drives Debt Surge

Uhuru Kenyatta’s administration pursued rapid development, launching projects like the Standard Gauge Railway and new highways to make Kenya a regional economic hub.

This vision led to a surge in borrowing, pushing Kenya’s debt to KSh 8.6 trillion ($70 billion USD) by 2022—almost equal to the combined GDP of its East African Community members (excluding Tanzania and Ethiopia). While these projects boosted growth, they also brought mounting debt, raising questions about fiscal sustainability.

The Ruto Era (2022-Present): The Fastest Climb Yet

If Kenya’s debt continues to grow at its current pace, it is projected to reach $138.34 billion by 2029—a figure that would exceed the projected GDP of its neighboring Tanzania for the same period.

This pace raises red flags about Kenya’s economic future. The cost of servicing the debt is already consuming a significant portion of the national budget, diverting resources from critical sectors like healthcare, education, and infrastructure.

Who Will Get Us Out ?

Kenya’s debt crisis is the product of both necessity and ambition. Kibaki laid the foundation with caution, Kenyatta fueled growth with bold investments, and Ruto is navigating the aftermath in an era of global economic uncertainty. Moving forward, Kenya needs a balanced approach—one that prioritizes fiscal responsibility, diversifies revenue sources, and leverages debt for genuine, sustainable development If not then we are deep in trouble.

Source: Central Bank of Kenya | Kenya National Treasury