Kenya’s Parliament has voiced concerns over the rising national debt, even as the Treasury reports significant savings from reduced borrowing at the Central Bank of Kenya (CBK).
Deputy Controller of Budget Stephen Masha told the National Assembly Committee on Debt and Privatization that reforms in financial management, including the rollout of the Single Treasury Account (STA) and automated government payment systems, have reduced CBK overdraft borrowing in the first quarter of the financial year from Sh1.9 billion last year to Sh700 million this year a 60 percent decline.
“These reforms have narrowed loopholes previously exploited by entities to divert funds after exchequer releases,” Masha explained. Automation now ensures funds allocated to ministries, counties, and agencies reach suppliers and contractors directly, reducing inefficiencies and idle balances.
Despite these achievements, MPs raised questions about the country’s overall debt trajectory. Committee chair Abdi Shurie noted that Kenya’s debt-to-GDP ratio continues to rise, contrary to government targets of reducing it to five percent. Kinangop MP Kwenya Thuku highlighted loans already signed but yet to be disbursed, which attract unnecessary commitment fees.
Masha acknowledged these challenges, urging clear budgeting for counterpart funding before signing loan agreements to avoid delays and wastage. The committee has requested a comprehensive report from the Controller of Budget on all loans currently incurring commitment fees or repayment obligations to ensure transparency and accountability.
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