Kenya will have to wait until October 2028 before its public debt falls within the legal borrowing limit, with the National Treasury saying ongoing measures to cut borrowing and strengthen public finances are expected to bring the country back within the required threshold.
The Treasury told the National Assembly's Public Petitions Committee that the present value of public debt is projected to reduce from 63.7 per cent of Gross Domestic Product (GDP) to the legal ceiling of 55 per cent over the next two years as the government's fiscal reforms continue to take effect.
Principal Secretary Chris Kiptoo said the programme to reduce the budget deficit and improve debt sustainability is already showing encouraging progress.
“The statutory anchor of 55 per cent of GDP in net present value terms is expected to be achieved by the end of October 2028,” he said in a submission to the National Assembly's Public Petitions Committee.
The submission was made in response to a petition presented by Beatrice Waiyaki and members of the Kiambu County Empowerment Network together with the Bunge Mashinani Initiative.
The petition calls for stronger supervision of public borrowing, increased transparency in debt management and greater public participation in decisions relating to government debt.
The group argues that the country's growing debt burden requires tighter parliamentary scrutiny. It is seeking the establishment of stronger oversight structures, a compulsory public debt register that citizens can access, independent expert reviews during debt discussions in Parliament and more involvement of the public, especially young people who will bear the long-term effects of today's borrowing.
However, the Treasury maintained that the country already has sufficient constitutional, legal and institutional safeguards governing public debt and opposed the proposal for additional laws.
Treasury figures show that Kenya's total public debt had reached Sh12.83 trillion by the end of March 2026.
Out of that amount, domestic debt stood at Sh7.15 trillion, accounting for 55.7 per cent of the total debt stock, while external debt was Sh5.68 trillion.
The submission further notes that public and publicly guaranteed debt stood at Sh11.81 trillion at the end of June 2025, representing 67.8 per cent of GDP.
According to the Treasury, the country's debt should now be measured using the framework introduced through amendments to the Public Finance Management Act in 2023.
The law replaced the former borrowing ceiling of Sh10 trillion with a debt anchor set at 55 per cent of GDP in present value terms.
The amendments also gave the government a five-year transition period to bring public borrowing within the new legal limit.
Treasury said the revised framework ties borrowing to Kenya's capacity to repay instead of relying on a fixed monetary cap.
“This embeds inter-generational equity directly into the statutory debt architecture,” the submission stated.
“Future borrowing is governed by Kenya’s economic capacity to service it.”
As part of efforts to achieve the target, the Treasury said it will continue narrowing the fiscal deficit, increase the use of longer-term Treasury bonds and give preference to concessional financing instead of commercial loans.
Under the 2026 Medium-Term Debt Management Strategy, the government plans to finance 78 per cent of its net borrowing from the domestic market, with the remaining 22 per cent coming from external sources while giving priority to lower-cost financing.