The ministry forecasts that debt payments will cross the Sh1 trillion mark in President Uhuru Kenyatta's last year in office, underlining the country’s push to restructure some of the arrears to ease pressure on thinning tax receipts amid Covid-19 crisis.
Treasury chiefs project in the medium-term Budget Estimates that expenditure on servicing the country's rising debt will top Sh1.023 trillion in the year ending June 2022 from Sh904.7 billion next financial year starting July 2020.
Treasury statistics show domestic investors will pocket the bulk of debt repayments, which will rise from Sh515.50 billion budgeted for the current year ending June 2020 to Sh570.38 billion projected for next fiscal year starting in July and Sh617.25 billion the following year.
Debt obligations to China, which accounts for a third of Kenya's foreign, are estimated at Sh83.41 billion this financial year, jumping to Sh95.08 billion in the year starting July and Sh120.01 billion in President Kenyatta's last year in office.
Kenya is also experiencing pressure from maturing short-term domestic securities, with Central Bank of Kenya (CBK), the government's fiscal agent, last month offering investors in maturing one-year T-bills an option to "switch" the cash to another facility.
