Kenya ranked third among African countries with highest debt to GDP ratio
Kenya is third among African countries with the highest government debt compared to the ratio of the country’s gross domestic product (GDP).
According to World of Statistics, Kenya’s debt to GDP is at 67.3 per cent while Eritrea tops the list with 164 per cent. South Africa comes in second among African countries at 67.4 per cent. Nigeria comes in fourth at 38 per cent with the four countries being the only ones that made to the list.
Globally, Japan takes the lead with 264 per cent followed by Greece at 171 per cent.
On the flip side, the Democratic Republic of Congo is the African country with the lowest government debt to its GDP ratio at 15.2 per cent followed by Burundi at 15.9 per cent and Botwswana at 18.2 per cent.
Data from the Central Bank of Kenya (CBK) indicate that public debt hit Sh9.145 trillion ($73 billion) in December, made up of Sh4.472 trillion ($36 billion) in domestic debt, Sh37.88 billion ($303 million) publicly-guaranteed debt and Sh4.673 trillion ($37 billion) in external debt.
The debt is poised to get past the Sh9.44 trillion ($75 billion) mark by June, according to earlier estimates by the Parliamentary Budget Office (PBO), which will be just Sh560 billion ($4.5 billion) shy of hitting the ceiling.
The National Assembly in June last year increased the public debt limit to Sh10 trillion ($80 billion) to allow the government to borrow Sh846 billion ($6.8 billion) to plug the budget deficit in the 2022/23 financial year.
President William Ruto is facing a fiscal deficit of Sh695.2 billion ($5.6 billion) in his first budget of Sh3.641 trillion ($29.1 billion) for 2023/24, which will force Parliament to raise the debt ceiling for the second year running to keep borrowing within the law.
Debt service expenses have increased over the last few years, from Sh850.01 billion ($6.8 billion) in 2021/22 to Sh1.3 trillion ($10.4 billion) in the fiscal year 2022/23. It is projected that this will increase to Sh1.8 trillion ($14.4 billion) in 2024/25.