Kenya’s public debt has increased by more than $11 billion in one year, according to the Central Bank. A fiscal situation aggravated by the Covid-19 pandemic. To face it, the government has already asked for deferrals of payments but they might not be enough.
This is a record number for Kenya. The public debt has exceeded US$66 billion. An increase of more than 21% since last year.
Before 2020, Kenya was already suffering from debt. The country had multiplied loans, sometimes at high interest rates, without managing to generate enough income to repay them.
Then, the Covid-19 pandemic, by slowing down the country’s economic growth, worsened the situation. The government had to face a 14% drop in revenues, linked to the economic crisis and a tax relief introduced in April for low income companies and individuals.
Kenya has also been forced to make new expenditures to mitigate the impact of the crisis. 363 million was mobilized between March and June, followed by $513 million to finance an economic stimulus package. Funds were used, among other things, for hospitals, for the most affected sectors of the economy, and for the most vulnerable households.
Today, even though the Kenyan government has obtained deferrals for the repayment of its loans, several experts are worried about the future of the country’s economy.