Kiharu Member of Parliament, Ndindi Nyoro, has raised concerns over the growing public debt in Kenya, drawing lessons from the recent financial turbulence in Senegal.
Taking to his official account, Nyoro noted that upon assuming office, the current Senegalese government led by President Diomaye Faye and Prime Minister Ousmane Sonko discovered that the previous administration under President Macky Sall had secretly borrowed around $13 billion in “off-the-book” loans. This meant the amount was not included in the country’s mainstream debt records.
“We must, as a country, avoid falling into that kind of abyss,” said Nyoro. “The national debt in Kenya is now over Ksh 12.5 trillion. This is the official loan book. We are borrowing Ksh 3.5 billion to Ksh 4 billion every day — and that’s net borrowing, excluding what is borrowed to repay previous loans.”
He warned that, unfortunately, in addition to mainstream borrowing, the Kenyan government has, for the first time, started taking loans “off the books” without transparency. He highlighted several examples of such practices that have been done in the last five months and continue to occur.
1. Securitisation: The government has already borrowed Ksh 175 billion by offering as security the fuel levy to be collected over the next seven years. Another loan exceeding Ksh 100 billion on the same basis is currently in progress.
2. Talanta Bond: The government borrowed Ksh 44.5 billion through the Talanta Bond, offering as security the money expected to be collected by the Sports Fund over the next 15 years. The interest alone on this loan will amount to Ksh 100 billion by the end of that period.
3. Tourism Fund: According to Nyoro, the Tourism Fund is following a similar borrowing pattern.
4. Housing Levy: There are ongoing plans to secure a loan of around Ksh 400 billion using the Housing Levy — money expected to be collected over several years — as collateral. This essentially means collecting future housing levies in advance.
5. Infrastructure Fund: The National Treasury is also in the process of forming an Infrastructure Fund, which Nyoro says is another vehicle for off-the-book borrowing.
He explained how this borrowing model operates: “Create a fund, then introduce levies, then use the levy collection history to borrow secretly off the books.”
Nyoro emphasized that while this approach is illegal, it also limits the country’s future fiscal flexibility. He noted that since all these funds and institutions are fully owned by the government, loans taken by them cannot be treated differently — especially for non-commercial institutions.
“If these institutions are unable to pay, the government will. That’s why we must not engage in such practices,” he warned.
Nyoro urged Kenyans to be aware of the situation, warning that the consequences will eventually surface.
“It is important that Kenyans know this. Ramifications will definitely come. I hope sanity reigns and we avert a catastrophe by acting differently,” he said.
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