Kenya’s public debt rose by 9 percent to Sh12.82 trillion by March 2026, exceeding Parliament’s 55 per cent GDP threshold by 15 points.
By
Kenya’s public debt rose by 9 per cent in the first nine months of the 2025/26 financial year to Sh12.82 trillion as of March 31, pushing the country further above the legal debt threshold set by Parliament.
A report released by Controller of Budget (CoB) on Wednesday reported an increase in the debt stock from Sh11.8 trillion recorded at the end of June 2025, equivalent to 69.9 per cent of Gross Domestic Product (GDP).
The report noted that the debt level exceeded Parliament’s recommended debt anchor of 55 per cent of GDP by 14.9 percentage points, underscoring mounting fiscal pressures facing the government.
“The stock of public debt increased from Sh11.80 trillion as at June 30, 2025 to Sh12.82 trillion as at March 31, 2026, representing a growth of 9 per cent,” the report states.
Domestic debt accounted for the largest share of the increase, rising by 13 per cent from Sh6.22 trillion to Sh7.05 trillion, driven by increased issuance of Treasury bills and bonds.
External debt grew by 4 per cent to Sh5.77 trillion, reflecting additional external borrowing and exchange rate movements.
The latest figures come amid rising debt-servicing obligations, with the CoB reporting that debt repayments consumed Sh1.35 trillion during the nine-month period, accounting for the bulk of expenditure under the Consolidated Fund Services.
The report also flagged growing reliance on spending outside approved budget provisions through Article 223 of the Constitution, with such expenditures rising nearly sixfold to Sh276.99 billion by March.
Article 223 allows the national government to withdraw funds from the Consolidated Fund for urgent and unforeseen needs before obtaining parliamentary approval.
The CoB report shows the amount was significantly higher than the Sh48.88 billion recorded during the corresponding period of the 2024/25 financial year.
“The continued increase in Article 223 expenditures raises concerns regarding adherence to budget credibility and the principle of prior parliamentary approval,” the report notes.
The Controller of Budget cautioned that while Article 223 provides flexibility in emergencies, excessive reliance on the provision could weaken fiscal discipline and undermine the integrity of the budget-making process.
The report also highlighted persistent implementation challenges, including delays linked to the rollout of the Electronic Government Procurement system and a growing stock of pending bills across government entities. Capital News
