National Treasury CS John Mbadi has admitted that Kenya faces economic challenges but is making progress toward recovery.
Speaking at a Bunge la Mwananchi forum in Nairobi, Mbadi cited a recent positive assessment by credit rating agency Moody’s, which highlighted improvements in Kenya’s debt repayment capability.
He noted that despite inheriting a budget deficit of Sh925 billion, the government has managed debt repayments effectively. However, he projected that Kenya would only experience relief in debt servicing between 2034 and 2048, when most of its loans will have been cleared.
“Are we doing okay? The answer is no, we are not doing okay but we are better than yesterday. Why do I say we are better than yesterday? There’s this rating that has come out from the Moody’s, some people think ni mushene (gossip), this is not mushene, this is factual,” he said.
“The credit rating is all about a country’s ability to repay its debt and that can only be assessed from certain parameters.”
Mbadi highlighted key indicators of Kenya’s economic recovery, citing falling inflation and reduced borrowing costs.
He noted inflation had dropped from 9.6% in October 2022 to 3.3% currently. Additionally, the interest rate on 91-day treasury bills has fallen from 15.6% to 9.5%, marking a shift to single digits for the first time under his tenure.
“This allows us to borrow cheaply to retire expensive loans, a crucial step toward escaping the debt trap,” Mbadi explained.
Despite inheriting a Sh925 billion budget deficit, Mbadi said the government has managed to stabilize the economy, averting a potential Eurobond default that had driven the shilling to 160 against the dollar.
He outlined upcoming debt obligations, including Eurobond repayments of Sh900 million in 2027, Sh1 billion in 2028, Sh1.2 billion in 2029, and Sh1.5 billion in 2031. However, Kenya will experience relief in debt servicing only between 2034 and 2048 when most loans are expected to be cleared.