Treasury Secretary John Mbadi faces demands to lower Kenya’s GDP debt ratio to 55% by 2029. The Controller of Budget reports a decrease in public debt from 71.9% in 2022 to 65.7% in mid-2024, though it remains above the IMF’s recommended threshold. To ensure financial stability, the National Treasury must adopt better debt management strategies and revenue reforms.
Treasury Cabinet Secretary John Mbadi is facing demands from Margaret Nyakango, the Controller of Budget, to reduce Kenya’s Gross Domestic Product (GDP) debt ratio to 55% by the year 2029. In a review of the 2025 Medium-Term Debt Management Strategy, Nyakango mandated the National Treasury to create a comprehensive plan to reach this crucial benchmark by the specified deadline.
Nyakango emphasized that Kenya’s total nominal public debt has witnessed a reduction, dropping from 71.9% in 2022 to 65.7% in June 2024. The 2025 Budget Policy Statement predicts the debt-to-GDP ratio will further decrease to 52.5% by 2029. Despite this positive trend, the current debt ratio exceeds the International Monetary Fund’s recommended threshold of 50% for developing nations.
The Controller of Budget underlined the necessity of prioritizing a more manageable debt level. To achieve this, she asserted that the National Treasury must implement strategies focused on effective debt management and necessary reforms in revenue collection, thereby averting potential financial instability.
In the latest review, Nyakango provided data indicating that as of December 2024, Kenya’s public debt stood at Sh10.93 trillion. Of this amount, Sh5.06 trillion (46%) was owed to external creditors, while Sh5.87 trillion (54%) was owed domestically. Furthermore, the total expenditure on public debt for the first half of FY 2024/2025 reached Ksh 666.34 billion, reflecting an increase from Ksh 597.58 billion during the same period of the previous fiscal year.
In summary, Kenya’s Treasury is under pressure to reduce its debt-to-GDP ratio to a recommended 55% by 2029, responding to the COB’s mandate. Although the public debt has been decreasing, it still surpasses internationally suggested limits. Effective management and reforms in revenue collection are deemed essential to mitigating financial risks and advancing towards the set targets.
Original Source: www.kenyans.co.ke
