China, Finland & 6 other countries Kenya owes the most amount of money

The Kenyan National Bureau of Statistics (KNBS) has unveiled its Economic Survey Report for 2024, presenting a comprehensive overview of the nation's economic landscape, including a detailed analysis of Kenya's national debt.

As of June 2023, Kenya's total debt stood at an alarming Sh9.6 trillion, reflecting significant fiscal challenges that the country faces.

Kenya's debt is composed of both domestic and foreign components, each contributing substantially to the total figure.

Domestic debt amounts to Sh4.3 trillion, which is held by investors in government bonds and other securities.

This domestic borrowing is crucial for funding various government initiatives and projects, although it also implies a substantial financial obligation towards local investors.

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The remaining debt is attributed to international lenders, including various countries and financial institutions.

The report highlights that the total debt surged by 19.3% to reach Sh9,623.9 billion by the end of June 2023.

This significant increase was primarily driven by a 27.0% rise in external debt, showcasing Kenya's growing reliance on foreign loans.

A notable trend observed in the report is the changing proportion of internal and external debt.

Internal debt, as a share of the total debt, decreased to 45.2% by the end of June 2023, down from 48.5% at the same time in 2022.

Bilateral and multilateral debts have also seen significant changes. Bilateral debt increased by 13.7%, reaching Sh1,257.5 billion, while multilateral debt rose sharply by 38.0% to Sh2,654.9 billion.

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Among the bilateral loans, China's financial relationship with Kenya is particularly noteworthy.

China's loans to the Kenyan government accounted for a substantial 70.2% of the total bilateral debt, amounting to Sh 882.5 billion by the end of June 2023.

The increasing national debt, particularly the substantial rise in external debt, poses several challenges for Kenya.

Managing this debt effectively will be crucial to ensure sustainable economic growth and to avoid potential financial crises.

The government may need to explore strategies for debt restructuring, enhance revenue collection, and foster economic policies that promote fiscal discipline.

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Moreover, the reliance on external borrowing, especially from countries like China, brings to the forefront discussions on the geopolitical implications and the need for balanced foreign relations.

Below are tables showing countries, local and international organisations the countries owes: