Kenya's public debt swells on currency volatility, more loans

Kenya's gross public debt swelled to 36 billion U.S. dollars at the end of September, pushed up by currency fluctuations and increased borrowing, the Treasury said Wednesday.

The debt increased from 29 billion dollars at end of September 2015 to 36 billion dollars, an equivalent of 48 percent of the gross domestic product.

"The overall increase is attributed to increased external debt due to exchange rate fluctuations, disbursements from external loans and more uptake of domestic debt during the period," the Treasury said in the Quarterly Economic and Budgetary Review for the period ending September.

The surge, however, was mainly contributed by increased domestic borrowing, with the internal loans standing at 52 percent of the total debt while external 48 percent.

"External debt stock during the period increased from 14.7 billion dollars in September 2015 to 16.9 billion dollars," the Treasury said.

On the other hand, gross domestic debt increased by 4.7 billion dollars from 13.8 billion dollars in September 2015 to 18.5 billion dollars.

Analysts expect the debt to continue growing in the coming months as the government seeks to cover a budget deficit and fund several infrastructure projects in the energy, water and transport sectors.

Kenya will also be holding an expensive general election in August next year, with the government expected to seek for cash to fund the exercise. Endit