Report reveals Kenyan government borrowed Sh258 billion in 11 new loans

President William Ruto’s administration borrowed Sh258.4 billion through 11 loans between May and August 2024, it has been revealed.

This is according to a report submitted to the National Assembly by the Treasury in accordance with the Public Finance Management (PFM) Act.

The report, presented on October 1, reveals that the loans were sourced from both multilateral and bilateral lenders.

“The total value of the 11 new loans signed is Sh258,408,080,602. Two of these had been disbursed by the time of this report,” reads the document.

Key loans include a Sh20.6 billion agreement with the International Development Association (IDA) on May 3, which focuses on improving primary healthcare services and enhancing institutional capacities.

Additionally, on June 4, the government secured a Sh39.7 billion loan from IDA aimed at promoting efficiency and transparency in public finance, as well as fostering competitive product and labour markets.

To support Kenya's Green and Resilient Expansion of Energy Programme Phase 2, a Sh5.8 billion loan was also obtained from IDA, intended to boost Kenya Power’s capacity for energy trade and renewable energy integration.

Repayment

This loan is scheduled for repayment in semi-annual instalments starting in 2029 and continuing until 2058.

Further, the government signed a significant Sh109.8 billion loan with the International Bank for Reconstruction and Development (IBRD) aimed at ensuring fiscal sustainability and resilient growth.

An additional Sh14.8 billion loan from the African Development Bank will enhance the green electricity supply through improvements to the high-voltage network.

These borrowing activities come on the heels of the rejection of the Finance Bill 2024, which sought to introduce tax measures to generate Sh350 billion.

Following public protests against the Bill, President Ruto indicated that borrowing would be necessary to fund government operations.

An earlier report revealed that the Kenya Kwanza government contracted 11 new loans worth Sh223.54 billion from September 1, 2023, to January 31, 2024.

The report from the Treasury showed that they borrowed Sh5.8 billion ($45 million) on October 23, 2023, for the development of urban roads in five counties in the north eastern region.

“The project shall create new job opportunities because of new transportation possibilities, improved market access and the possibility of labour migration. The project shall also enhance economic development and boost investment, as a result of the reductions in travel time and costs,” reads the report.