Kenya’s Treasury has announced plans to borrow Ksh1.02 trillion to bridge the growing budget deficit, highlighting mounting expenditure pressures on the government. Treasury Principal Secretary Chris Kiptoo disclosed the borrowing plan on Wednesday, stating that it aims to maintain fiscal stability amid rising spending demands.
According to Reuters, the proposed borrowing represents 4.9% of Kenya’s GDP, slightly higher than the 4.8% recorded in the current fiscal year. The financing package will include net external borrowing of Ksh241.8 billion (USD 1.86 billion) and net domestic borrowing of Ksh775.8 billion.
As of September 2025, Kenya’s total public debt had risen to Ksh12.06 trillion, with domestic debt standing at approximately Ksh6.66 trillion and external debt at Ksh5.39 trillion. The borrowing announcement has drawn criticism from Kiharu Member of Parliament Ndindi Nyoro, who noted that the current administration is borrowing over Ksh3 billion daily.
The government intends to use the borrowed funds to address critical service delivery gaps. This includes paying newly hired teachers and recruiting 20,000 intern teachers starting January 2026 to tackle the country’s teacher shortage. President William Ruto recently allocated Ksh1.6 billion for teacher training and an additional Ksh1 billion for promotions.
Funds will also support essential sectors such as health and security. The government recently recruited 10,000 police officers, the first major intake in over three years due to budget limitations.
The planned borrowing comes as Kenya awaits a delayed International Monetary Fund (IMF) programme, stalled over disagreements regarding securitised loan classifications. Meanwhile, PS Kiptoo urged government ministries and agencies to implement financial reforms, including an electronic procurement system, aimed at reducing graft and improving efficiency in public spending.
This borrowing plan underscores Kenya’s balancing act between addressing urgent service delivery needs and managing a growing public debt burden.
