Okoa Uchumi Draft Advocacy Strategy – September 2021

The Kenya public debt stock currently stands at Ksh 7.712 trillion as of June 2021, having
increased from Ksh 6.28 trillion in March 2020 when the first case of COVID-19 pandemic
was reported in Kenya. This consists of Ksh 3.697 trillion as domestic debt, and Ksh 4.015
trillion as foreign debt, implying reduced borrowing space given the borrowing threshold of
Ksh 9 trillion set by parliament and provided for in section 50(5) of the PFM Act 2012.The
relatively high level of Kenya’s indebtedness and its rising debt burden has serious implications
on the country’s development and debt sustainability initiatives as well as a rising concern on
the rise in domestic debt and its effect on investment in Kenya.
Kenya’s PFMA framework is progressive and robust in its requirements for debt
accountability. However, gaps in the constitution and PFMA have been exploited by Treasury
officials to procure heavy levels of debt, placing the country on the path to debt distress. The
Covid-19 pandemic has exacerbated the situation driving the government into a debt trap where
Kenya is borrowing with most of the funds going to repayment of debt.