Kenya is among nineteen African countries classified as having high risk of debt distress with the country now accounting for 4pc of Africa’s total debt.
Latest data by the Central Bank of Kenya (CBK) indicates that the country currently has public debt to the tune of Ksh 10.9 trillion as at December 2024 out of which Ksh 5.9 trillion is held by domestic creditors while Ksh 5.1 trillion is by external creditors.
According to the African Debt Outlook 2025 by Afreximbank, Kenya is among 10 countries which constitute 69pc of Africa’s external debt stock which was projected at $1.17 trillion last year.
The bank attributes the high debt levels in Kenya to among others, COVID-19 pandemic, rising costs for essential imports, including fuel and food.
“These rising import expenses worsened current account deficits across the continent, depleting foreign reserves and weakening currencies. For instance, Kenya saw a sharp depreciation of its shilling in 2022 due to high energy import costs. The increase in import costs led to inflation, eroding purchasing power, exacerbating poverty, and triggering social unrest, as evident in protests over rising food and fuel prices in several African countries,” the bank says in the report.
The report shows that the highest debt holders in the continent include South Africa which accounts for 14pc of external debt, Egypt 13pc, Nigeria 8pc, Morocco and Mozambique 6pc each. Angola on the other hand accounts for 5pc of Africa’s external debt stock, Ghana 4pc, Côte d’Ivoire 3pc same as Senegal 3pc.
Kenya’s East African Communities including Tanzania, Uganda, Democratic Republic of Congo, and Rwanda were classified as having moderate risk of distress.
Afreximbank attributes the sharp rise in external debt within the last decade to Eurobonds which African countries including Kenya have opted for to finance key projects and pay off existing loans.
“Additionally, the urgent need to address infrastructure deficits has prompted several African frontier economies to increasingly tap into international capital markets, as evidenced by a rise in Eurobond issuances. Consequently, the continent’s debt burden has grown substantially over the past 15 years,” said the bank.
Africa’s total external debt is projected to hit $1.29 trillion by 2028.
According to the outlook, global public debt is also projected to reach $102 trillion in 2024, marking a $ 5 trillion increase from 2023.
