President William Ruto has stated that Kenya will not default on its debt and plans to ramp up tax collection in the next two years.
Ruto said this in a wide-ranging interview with Kenyan media outlets as reported by Reuters.
His administration has pledged to curb expensive commercial borrowing in favour of cheaper sources like the World Bank in order to reduce debt servicing pressures.
Government plan: Assuring that Kenya will meet up with its obligation, Ruto said the government aimed to collect an extra Sh1 trillion ($8.11 billion) in taxes in the next 24 months, reiterating plans to cut 300 billion shillings in borrowing in the current fiscal year that runs until the end of June.
He said “This country of ours will not default. I want to give you my assurance. Our country will not default on our obligations. We have applied brakes on any more borrowing,”
Kenya’s debt: Data by the Central Bank of Kenya (CBK) shows that Kenya’s debt grew by Sh762.7 billion in the year to September 2022 to stand at Sh8.7 trillion as the country races towards the Sh10 trillion borrowing cap set by Parliament last June.
The country’s debt stock represents 62.3% of its gross domestic product (GDP) as domestic stock stood at Sh4.38 trillion while external debt amounted to Sh4.35 trillion.
Its public debt surged during an infrastructure construction drive under Uhuru Kenyatta, Ruto’s predecessor thereby prompting warnings from rating agencies.
In February last year, Fitch warned that rising government debt levels and global interest rates were increasing the risk of credit rating downgrades in 10 African countries, with Kenya, Ghana, Lesotho, Namibia, Rwanda, and Uganda most at threat.