Out of Ksh2.5 Trillion 2024 Taxes, Ksh1.7 Trillion Paid Debt & Interest - CoB Report 

A report by the Controller of Budget Margaret Nyakang'o has revealed that Kenya spent Ksh1.7 trillion on loan repayments and interest charges in the 2024/2025 Financial Year.

This was 68% of the revenue collected by the Kenya Revenue Authority (KRA) during the same period.

According to records from the taxman, in the financial year ending June 2025, revenue generated internally was Ksh2.5 trillion.

"The allocation towards servicing the public debt in the FY 2024/2025 amounted to Ksh1.74 trillion, representing 88 per cent of the Consolidated Fund Services (CFS) budgetary allocation, compared to Ksh1.78 trillion allocated in the FY 2023/2024.

"This comprised Ksh744.93 billion for principal redemption and Ksh996.86 billion for interest payments," read the report in part.

In terms of external debt, Kenya spent Ksh361.54 billion to repay principal loans, while Ksh228.37 billion was used for loan interest payments. This brought the total payments for external loans to Ksh589.91.

For domestic debt, Kenya repaid Ksh383.39 billion in principal and paid Ksh768.49 billion in interest. On domestic debt alone, Kenya spent Ksh1.15 trillion - almost half of the country's revenue collected.

Kenya's Overall Debt Status

Overall, Kenya's debt currently stands at 11.7 trillion, having risen by over Ksh 1 trillion in just 12 months.

As of June 30, 2025, Ksh5.40 trillion was owed to external lenders, and Ksh6.33 trillion was owed to domestic lenders.

Out of the outstanding external debt, Ksh3 trillion is owed to multilateral lenders such as the World Bank and the International Monetary Fund (IMF).

In terms of bilateral lenders (foreign countries), Kenya's debt stands at Ksh1.1 trillion. Most of the bilateral debt is owed to China at Ksh652 billion ( based on the figures issued by the National Treasury in May).

Another Ksh1.2 trillion is owed to foreign international banks.

Domestically, Ksh2.7 trillion is owed to commercial banks and the Central Bank of Kenya (CBK). The other Ksh3.5 trillion is owed to non-bank lenders, including investors in government securities.

"From the analysis, the surge in domestic debt stock indicates a growing reliance on short-term borrowing by the government to finance the budget deficit," CoB Margaret Nyakang'o stated.

"In the FY 2023/24, the government deviated from its 2024 Medium Term Debt Management Strategy, which recommended a borrowing mix of 50:50, that is, an equal amount of borrowing from the domestic and external sources. Instead, the actual borrowing ratio for the period was 54:46."