The National Treasury has released its annual borrowing plan for the financial year 2024/2025, forecasting a 5.5% growth rate for Kenya’s economy. Treasury Cabinet Secretary John Mbadi expressed confidence in this optimistic outlook, highlighting the government’s commitment to economic stability despite global geopolitical challenges.
“Despite these global challenges, we expect Kenya’s economy to remain stable in the medium term. For the fiscal year 2024/25, we project a real economic growth rate of 5.5%. This positive outlook stems from strong performance in the service sectors, continued growth in agriculture, and improved export activity,” Mbadi said at the plan’s unveiling.
The projected growth comes amid rising global tensions, including conflicts in the Middle East and the ongoing war between Russia and Ukraine. While these factors pose challenges to the global economy, the Treasury remains confident in Kenya’s ability to navigate these uncertainties. However, Mbadi cautioned that erratic weather patterns could pose a risk to the country’s growth prospects, particularly in the agricultural sector.
According to the Annual Borrowing Plan, Kenya’s total public debt had reached KES 10.56 trillion by June 2024, which represents 65.5% of the country’s Gross Domestic Product (GDP). Of this, KES 5.41 trillion is domestic debt (33.5% of GDP), while KES 5.15 trillion is external debt (32.0% of GDP). Disbursements from borrowing during the year totaled KES 760.5 billion, including project loans, program loans, and commercial loans.
In light of a projected budget deficit of KES 768.6 billion for the financial year 2024/2025, the government plans to secure KES 355.5 billion from external sources and KES 413.1 billion from domestic lenders.
President William Ruto’s administration has indicated that a significant portion of the funds will be used to service existing debts and stabilize the economy. The Treasury emphasized that continued borrowing is essential to maintain the current trajectory of economic growth while addressing the country’s debt obligations.
