William Ruto Borrows Largest Amount In Single Year As Kenya's Debt Surpasses KSh 10t

• President William Ruto vowed to slam brakes on debt after he took over from Uhuru Kenyatta, whom he accused of overborrowing
• In the financial year ended June, Kenya's gross debt rose by KSh 1.56 trillion to reach KSh 10.19 trillion, up from KSh 8.63 trillion during the same period in 2022
• The National Assembly's Public Debt and Privatisation Committee approved the debt anchor on a percentage of the Gross Domestic Product (GDP) borrowing threshold

President William Ruto's government borrowed the largest funds in a financial year as Kenya's debt crossed the KSh 10 trillion mark.

What is Kenya's debt?

In the financial year ended June, Kenya's gross debt rose by KSh 1.56 trillion to reach KSh 10.19 trillion, up from KSh 8.63 trillion during the same period in 2022.

Data from the National Treasury, as reported by Business Daily, showed the country surpassed the KSh 10 trillion mark by KSh 189.53 trillion.

In the last nine months of the 2022/2023 financial year, Ruto's administration borrowed KSh 1.43 trillion, representing 91.52% of the total debt during the period.

Why did Ruto overborrow?

Kenya was forced to borrow after it failed to meet its tax collection revenues.

According to Daily Nation, domestic borrowing surpassed KSh 4.7 trillion in June 2023, while foreign borrowing stood at KSh 5.36 trillion.

Kenya borrowed KSh 1.06 trillion from international lenders such as the World Bank, International Monetary Fund (IMF) and African Development Bank (AfDB).

Why did Kenyan MPs scrap debt ceiling?

The lawmakers scrapped the KSh 10 trillion debt ceiling following the rising debt.

The National Assembly's Public Debt and Privatisation Committee approved the debt anchor on a percentage of the Gross Domestic Product (GDP) borrowing threshold.

Ruto's government can borrow up to 55% of GDP to finance the KSh 3.6 trillion budget.

William Ruto's promise on borrowing

Before he was elected president, Ruto promised to cut down on excessive borrowing.

Speaking during the 2022 presidential debate held at the Catholic University of Eastern Africa (CUEA) on Tuesday, July 26, 2022, the United Democratic Alliance (UDA) leader argued Kenya could raise enough revenue to finance itself.

"We will first slow down, put brakes on borrowing, put brakes on unbudgeted projects; we need to raise our own revenues. We have areas that we believe we can raise revenues from. We can actually raise 90% of all collectable Value Added Tax (VAT), for example," Ruto explained.