Top 8 Countries that Kenya Owes Money - Govt Report 

As of the end of June 2023, Kenya's total debt has increased by 19.3 percent, reaching Ksh9.6239 trillion from Ksh8.0658 trillion in 2022, according to a report Economy Survey published by KNBS. 

According to the survey, the substantial increase was primarily driven by a 27.0 percent rise in external debt in 2023, reaching Ksh5.276 trillion. External debt refers to money the government borrows from foreign lenders, including foreign governments (bilateral loans), international financial institutions (multilateral loans), and private sector creditors. 

The KNBS Survey also showed that the proportion of internal debt relative to total debt had decreased to 45.2 percent as of June 2023, down from 48.5 percent at the end of June 2022. As of June 2023, Kenya’s internal debt stood at Ksh4.347 trillion. 

Bilateral and multilateral debts are significant components of Kenya's external debt. The KNBS Survey shows that as of June 2023, Kenya's bilateral debt increased by 13.7 percent to Ksh1.257.5 trillion, while multilateral debt rose by a significant 38.0 percent to Ksh2.654.9 trillion.

The report also showed which countries Kenya owes the most money to. According to the Survey, a large portion of Kenya's bilateral debt is owed to China, which accounts for 70.2 percent of the total bilateral loans, amounting to Ksh882.5 billion as of June 2023. 

‍

Read Also: How Much Taxes Do Car Owners Pay in Kenya

Kenya's Major Creditors: The Top 8 Lending Nations

According to the 2024 Economy Survey published by KNBS, Kenya's biggest creditors are: 

1. China: Ksh882.54 billion
2. France: Ksh109.72 billion
3. Japan: Ksh99.12 billion
4. Germany: Ksh44.75 billion
5. Belgium: Ksh25.60 billion
6. USA: Ksh1.20 billion
7. Finland: Ksh727.04 million
8. Denmark: Ksh431.48 million

According to the KNBS Survey, between June 2022 and June 2023, the debt from the following countries increased:

1. Germany: Increased from KSh34.88 billion to KSh44.75 billion
2. Japan: Increased from KSh83.59 billion to KSh99.12 billion
3. France: Increased from KSh90.10 billion to KSh109.72 billion
4. Belgium: Increased from KSh12.94 billion to KSh25.60 billion
5. China: Increased from KSh804.81 billion to KSh882.54 billion

The report also showed debt from the following countries decreased:

1. USA: Decreased from Ksh1.26 billion to KSh1.20 billion
2. Denmark: Decreased from Ksh456.93 million to Ksh431.48 million
3. Finland: Decreased from Ksh884.11 million to Ksh727.04 million

Apart from the eight countries listed, Kenya also owes money to other countries. The combined debt from these other countries increased from Ksh76.82 billion in June 2022 to Ksh93.41 billion in June 2023, an increase of Ksh16.59 billion, the KNBS Survey shows.

The total bilateral loans increased from Ksh1.1057 trillion in 2022 to Ksh1.2574 trillion in 2023. This represents a substantial increase of Ksh151.7 billion, reflecting an overall rise in Kenya's external debt obligations to bilateral creditors over the year. Bilateral debt refers to loans from other countries, typically under government-to-government agreements.

Kenya’s Multilateral Lenders

Multilateral debt refers to loans from international organizations with multiple member countries, such as the World Bank and the IMF. As of June 2023, Kenya’s total multilateral debt stood at ksh2.655 trillion, up from Ksh1.923 trillion in June 2022. 

According to the KNBS Survey, The International Fund for Agricultural Development (IFAD), a specialized United Nations agency, and the International Development Association (IDA), a member of the World Bank Group, own a large chunk of Kenya's multilateral debt. Together, IFAD and IDA account for Ksh1.605 trillion of Kenya’s outstanding multilateral debt. 

The African Development Bank (AfDB) Group is Kenya's second-biggest multilateral lender. According to the KNBS Survey, Kenya owes the AfDB Ksh517.9 billion. The International Monetary Fund (IMF) comes third with the Survey showing Kenya owes them Ksh335.6 billion. 

Kenya’s multilateral lenders:

Year 2022:

• International Organisations:
  • IDA/IFAD: Ksh1.233 trillion
  • EEC/EIB: Ksh20.752 billion
  • IMF: Ksh206.371 billion
  • ADF/AfDB: Ksh385.291 billion
  • Other multilateral: KSh77.316 billion
  • Total (multilateral): Ksh1.923 trillion

Year 2023:

• International Organisations: some text
  • IDA/IFAD: Ksh1.605 trillion
  • EEC/EIB: Ksh29.163 billion
  • IMF: Ksh335.593 billion
  • ADF/AfDB: Ksh517.900 billion
  • Other multilateral: Ksh166.820 billion
  • Total (multilateral): Ksh2.655 trillion

Kenya’s Internal Debt 

Internal debt refers to money the government borrows within the country. Examples include government securities like Treasury bills and bonds issued within Kenya.

According to the KNBS Survey, Kenya’s internal debt increased from Ksh3.910 trillion in 2022 to Ksh4.347 trillion in 2023. The increase was driven by the value of treasury bonds issued by the CBK increasing from Ksh3.569 trillion in 2022 to Ksh4.014 trillion in 2023. 

The table below shows Kenya’s outstanding internal debt:

Internal Debt:

• 2022:

• Treasury Bills: KSh628.754 billion
• Treasury Bonds: KSh3.569 trillion
• Non Interest bearing debts: KSh18.899 billion
• IMF funds on-lent to Government: KSh40.741 billion
• Less government deposits and on-lending: -KSh418.285 billion
• Total Internal (net): KSh3.910 trillion

• 2023:

• Treasury Bills: KSh614.726 billion
• Treasury Bonds: KSh4.014 trillion
• Non Interest bearing debts: KSh17.789 billion
• IMF funds on-lent to Government: KSh95.516 billion
• Less government deposits and on-lending: -KSh484.584 billion
• Total Internal (net): KSh4.347 trillion

Read Also: Is Investing in Government Bonds a Good Idea? (Pros & Cons) 

Wrapping Up 

The Kenyan government incurs internal debt when it issues Treasury bills and bonds to fund developments and the deficit between its tax and other revenue receipts and spending. 

Kenya also takes on external debt for several reasons, primarily to finance development projects and address fiscal deficits. Bilateral loans from countries like China allow the government to finance large-scale infrastructure projects such as roads, railways, ports, and energy facilities. 

Conversely, multilateral debt from international financial institutions like IFAD stimulates economic growth in sectors such as agriculture and manufacturing. 

However, it's important to note that while external borrowing can provide valuable resources for development, it also comes with risks. High debt levels can strain government finances and can lead to debt-servicing challenges. According to the KNBS Survey,  the total debt servicing charges are expected to increase by 55.4 percent to KSh 1.866.0 trillion in 2023/24.