Ruto government's Sh3.5bn-a-day borrowing spree

The total public debt has hit Sh13 trillion, putting pressure on repayment amid depressed revenue collection and reduced donor support.

President William Ruto’s austerity promises may have been music to the ears of Kenyans, but the latest National Treasury data shows that Kenya borrowed Sh416.2 billion within the first four months of this year.

The seven new foreign loans between January 1, 2026, and April 30, 2026, translate to Sh104.04 billion per month, Sh3.47 billion per day, and Sh144.5 million per hour, further deepening the country’s public debt crisis.

According to official data, the total public debt has hit Sh13 trillion, putting pressure on repayment amid depressed revenue collection and reduced donor support.

As of March 31, 2026, the public debt stock stood at Sh12.82 trillion, comprising Sh5.68 trillion owed to external lenders (44 per cent) and Sh7.14 trillion due to domestic lenders (56 per cent), according to the latest report by the Controller of Budget, Margaret Nyakang’o.

This is equivalent to 70 per cent of Gross Domestic Product (GDP), exceeding the 55 per cent threshold approved by Parliament. And it will get worse.

“The high debt-to-GDP ratio is likely to persist due to the high current fiscal deficit of 6.4 per cent. According to the International Monetary Fund (IMF), the debt-to-GDP ratio is projected to rise further to 71.6 per cent in 2026 and 72.4 per cent in 2027, approaching the 2023 peak of 73.4 per cent,” the Controller of Budget cautions in the report.

Most of the revenue is going towards debt repayment, which forms the bulk of Consolidated Fund Services (CFS) expenditure, leaving very little for development.

According to the Controller of Budget, the allocation for servicing the public debt in the 2025/26 financial year amounted to Sh1.90 trillion, representing 89 per cent of the CFS budgetary allocation, up from Sh1.74 trillion allocated in the 2024/25 financial year.

“The loans include six new loans and one International Sovereign Bond contracted between the Government of Kenya and multilateral and commercial creditors,” the National Treasury document states.

Read: Irony of Treasury admitting borrowing not sustainable, then going for more

“The ISB had already been disbursed by the time this report was submitted,” the document adds, providing a breakdown of the contracted loans denominated in US dollars, Japanese yen and Ukrainian hryvnia.

Section 31(3) of the Public Finance Management (PFM) Act requires the Cabinet Secretary for the National Treasury to update Parliament on the loans procured by the government.

“At the end of every four months, the Cabinet Secretary shall submit a report to Parliament stating the loan balances brought forward, carried down, drawings and amortisations on new loans obtained from outside Kenya or denominated in foreign currency,” states the Act.

The PFM Act also mandates the Cabinet Secretary to include information “as may be prescribed by regulations specifying the names of the parties to the loan, the amount of the loan, and the currency in which it is expressed and in which it is repayable.”

The Cabinet Secretary is further required to indicate the terms and conditions of the loan, including interest and other charges payable, terms of repayment, the amount of the loan advanced at the time the report is submitted, the purpose for which the loan was used, and the perceived benefits of the loan.

Read: How government borrowed Sh1.4 trillion without consulting the Attorney General - Audit

The seven new loans include an International Sovereign Bond (ISB) of Sh291.49 billion and two separate affordable housing finance projects worth Sh45.34 billion and Sh16.2 billion.

The borrowed amount also includes a second additional financing for the Primary Education Equity in Learning Programme of Sh29.15 billion, a NEXI Samurai loan facility of Sh20.33 billion, Support to Higher Education, Science and Technology Phase II of Sh9.8 billion, and climate action financing of Sh3.9 billion.

The public debt stock increased by nine per cent from Sh11.80 trillion as of June 30, 2025, to Sh12.82 trillion as of March 31, 2026, according to the Controller of Budget.

“The management of public debt remains one of the most critical fiscal policy challenges facing Kenya’s economy. In recent years, rising debt levels, increasing debt-servicing obligations, exchange-rate volatility, and constrained fiscal space have heightened concerns about debt sustainability and refinancing risks. As of March 2026, Kenya’s public debt stock had risen significantly, with external debt continuing to expose the country to foreign-exchange and global interest-rate risks,” the Controller of Budget cautions.

This came as he set his sights on reducing the public debt, which he admitted was choking the country’s economic growth.

“We will change this tradition of applying for loans and instead focus on investments and labour-intensive programmes as opposed to capital-intensive projects,” President Ruto, then Deputy President, said on June 3, 2022, at a campaign rally in Nairobi’s Kamulu area.

He argued at the time that “borrowing money to run the government will not be an option” under his government, a pledge that was welcomed by economic and financial experts.

The President went on to accuse his then main rival in the August 9, 2022, presidential election—Azimio presidential candidate Raila Odinga—of “planning to continue massive borrowing.”

“Ours is about exploiting available local options to generate income to run the country,” he said.

Central Bank of Kenya Governor Kamau Thugge at his office in Nairobi on June 21, 2024.

The President warned that over-borrowing was not good as “over 60 per cent of the country’s revenue goes into debt repayment.”

However, a document presented to Parliament in November 2025 by Central Bank of Kenya (CBK) Governor Dr Kamau Thugge showed that President Ruto’s Kenya Kwanza administration had borrowed at least Sh3 trillion within the first three years of office following his election in August 2022.

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The borrowed funds were used to finance recurrent expenditures contrary to the Public Finance Management Act.