As of April 30, this year, public debt according to the National Treasury stood at Sh11.5 trillion, up from the Sh11.36 trillion that it had reported in March, with the country borrowing approximately Sh100 billion monthly to April.

The National Government Budget Implementation Review Report for the third quarter of Financial Year 2024/25, covering July 1, 2024, to March 31, 2025, from the Controller of Budget Margret Nyakang’o shows that out of the Sh11.36 trillion, Sh5.24 trillion is owed to external lenders (46 per cent) and Sh6.12 trillion is owed to domestic lenders (54 per cent).

According to the report, the public debt stock increased by 7 per cent from Sh10.58 trillion as of June 30, 2024, to Sh11.36 trillion as of March 31, 2025.

“External debt increased by 1 per cent due to additional loan disbursements of Sh194.05 billion from foreign commercial banks and Sh126.28 billion from Multilateral Organisations, while domestic debt recorded 13 per cent growth attributable to increased borrowing in the domestic market,” it points out.

Notably, the supplier credit has recorded neither loan disbursement nor repayment in the first nine months of FY 2024/2025.

With regards to servicing of the public debt, the report says that the allocation towards servicing of the debt in the financial year 2024/2025 amounted to Sh2.04 trillion, representing 89 per cent of the Consolidated Fund Services (CFS) budgetary allocation, compared to Sh1.87 trillion allocated in the FY 2023/2024 comprising Sh1.05 trillion for principal and Sh995.77 billion for interest payments.

The allocation towards external debt comprised Sh476.40 billion for principal and Sh259.91 billion for interest, while domestic debt comprised Sh569.89 billion and Sh749.24 billion towards principal redemption and interest payment, respectively.

The total expenditure on public debt, the report says, amounts to Sh1.20 trillion, representing 59 per cent of the revised estimates, compared to Sh1.24 trillion (66 per cent) recorded in a similar period, FY 2023/2024.

Reads the report: “The decrease is attributed mainly to reduction in the external debt principal and interest payments, which stood at Sh465.48 billion compared to Sh614.187 billion paid in a similar FY 2023/24 period.”

With regards to external debt servicing, the report says that this amounted to Sh466.73 billion, comprising Sh295.27 billion on principal payment, Sh170.20 billion on interest payment, Sh770.54 million on commitment fees, Sh2.80 million on penalties paid first, and Sh477.14 million on other charges – Service Fees.

Reads the report: “The total domestic debt payment was Sh729.45 billion, consisting of Sh186.85 billion and Sh542.60 billion for principal and interest payments, respectively.”

The move comes hardly days after Treasury Cabinet Secretary John Mbadi raised the alarm over mounting public debt and called for strict financial discipline, strategic economic planning, and more efficient revenue mobilisation to avert a potential fiscal crisis.

While presenting the 2025/2026 national budget estimates in the National Assembly, the CS acknowledged that the government is operating under constrained fiscal space due to years of rapid debt accumulation.

Mbadi said: “We face constraints on account of public debt accumulation. Progressively, our debt-carrying capacity has narrowed. This calls for prudence and discipline on how we manage and take on new debt.”

With regards to the overdraft facility available to the government, the report shows that in the period under review, the overdraft limit stood at Sh97.05 billion and was charged at an average interest rate of 12 per cent per annum on the amount outstanding at the end of each month.

The overdraft facility administered through the Central Bank of Kenya is a way of short-term borrowing by the government to cover temporary cash shortfalls.

It is repayable within twelve months is restricted to a maximum of five per cent of the most recently audited revenues and is expected to be paid off by the end of the financial year as specified in Section 15 (3) of the PFM Act.

In the first nine months of the Financial Year 2024/2025, the total charge on the overdraft facility was Sh5.2 billion.

According to the report, in July 2024, the government took an overdraft of Sh758 million, in August Sh596.3 million, in September Sh569.79 million, in October Sh488.1 million, in November Sh591.9 million and in December Sh479.3 million.

In January this year, the government took Sh501.7 million, in February Sh490.1 million and in March Sh735.3 million.