The World Bank is the country’s biggest lender overtaking China with a share of Sh1.2 trillion as of December 2021, according to Treasury records.
The latest Status of Economy report tabled in Parliament shows that China, which has been a centre of focus by anti-debt crusaders, is owed to the tune of Sh802 billion, coming close to Sh820 billion borrowed through sovereign bonds.
Treasury’s appetite for Chinese loans has been on a steady decline since March 2021 as the World Bank’s is rising steadily.
The report also shows that the International Monetary Fund had lent Kenya up to Sh211 billion.
Loans from the African Development Bank totaled Sh368 billion with debt owed to Japan amounting to Sh163 billion for the period under review.
Even so, China still has the highest portion of bilateral debt – borrowed from other countries – which totaled Sh1.216 trillion as of December 2021.
It was followed by Japan (Sh163 billion), France (Sh93.8 billion), Italy (Sh40 billion) and Germany at Sh38.8 billion.
Further, the report shows that the Treasury borrowing has over time favoured multilateral lenders to bilateral sources and commercial lenders.
Multilateral lenders accounted for Sh1.8 trillion, followed by commercial banks at Sh1.2 trillion and bilateral lenders at Sh1.1 trillion of the Sh4.17 trillion external debt.
Local commercial banks accounted for Sh1.94 trillion of the domestic borrowings, with the Central Bank at Sh88 billion. The total public debt was Sh8.2 trillion as of the said date.
In terms of repayment, China took the lion’s share of the Sh137 billion debt servicing costs incurred as of December 2021 at Sh29.9 billion.
The World Bank was paid Sh18.6 billion of the Sh25.1 billion repayments for multi-lateral loans.
Italy was among the topmost paid among bilateral lenders at Sh5.4 billion.
“By end of December 2021, the total cumulative debt service payments to external creditors amounted to Sh137.3 billion comprising Sh80 billion principal and Sh57.3 billion interest,” Treasury said.
“The debt to GDP ratio increased to 66.2 per cent in December 2021 from 64.5 per cent in December 2020.
The increase is attributed to external loan disbursements, exchange rate fluctuations, and the uptake of domestic debt during the period,” the report reads.
Treasury Cabinet Secretary Ukur Yatani tabled a Sh3.3 trillion ($28.69 billion) spending plan for the 2022/2023 fiscal year with a focus on accelerating growth of an economy destroyed by Covid-19.
The plan also seeks to ensure implementation of the Jubilee government’s legacy projects in agriculture, manufacturing, housing and health sectors.
The budget, the last under President Uhuru Kenyatta’s administration, has been crafted with a view to improving the livelihoods of Kenyans weighed down by a high cost of living and create additional employment opportunities in an economy that lost over 1.7 million jobs to the pandemic in 2020.
The ambitious spending plan that focuses on the enhancement of the Economic Stimulus Programme and implementation of the infrastructure projects under the ‘Big Four’ agenda calls for increased funding, with Yatani targeting Sh50.4 billion ($438.26 million) in additional tax revenues and Sh862.5 billion ($7.5 billion) in new borrowing during 2022/23.
With the government debt closing in on the Sh9 trillion ($78.26 billion) ceiling, Yatani has proposed an amendment to the Public Finance Management Act to create more room for increased borrowing to ease the growing expenditure pressures.