Kenya's 13.8 Trillion Debt Burden: NTA CEO Patrick Nyangweso and an Exclusive Interview with the Controller of Budget

NAIROBI, THURSDAY 13 AUGUST 2026. At a high-level coalition meeting on the national debt burden and domestic resource mobilization convened by the National Taxpayers Association (NTA), Kenya's fiscal authorities presented the hard numbers on the country's debt position. The national debt now stands at approximately KES 13.8 trillion, and 69 shillings of every 100 shillings collected in tax is committed to debt servicing before a single cent reaches a hospital, a county, or a classroom.

The forum brought together policymakers, civil society organizations, researchers, development partners, and fiscal governance experts operating under Kenya's National Tax Policy (2023) and Medium-Term Revenue Strategy (2024/25 to 2026/27). The discussions focused on how public debt is affecting service delivery and the policy changes needed to address it.

Key Takeaways

• Kenya's public debt stands at KES 13.8 trillion, roughly 68.5 to 69.5 percent of GDP, breaching the 55 percent anchor in the Public Finance Management Act.

• 71.2 percent of ordinary revenue collected in FY2024/25, KES 1.7 trillion of KES 2.42 trillion, was absorbed by debt servicing.

• In an exclusive interview with The 254 Report, the Controller of Budget's office confirmed it cannot legally block Treasury borrowing, and named the new National Infrastructure Fund as the vehicle for private participation in state debt.

• NTA CEO Patrick Nyangweso proposed a Singapore Approach: expenditure discipline, SME tax incubation windows, and export-driven production.

• KES 623 billion in verified pending bills and a drop in average consumer spending to KES 800 are straining the private sector.

The 71 Percent Reality: How Kenya's Debt Burden Is Serviced

Opening the coalition, Patrick Nyangweso, Chief Executive Officer of the National Taxpayers Association, presented the key figures on the debt. Out of KES 2.42 trillion collected in ordinary revenue during the 2024/2025 financial year, KES 1.7 trillion went to debt servicing, a ratio of 71.2 percent. Total interest payments alone consumed KES 987.5 billion, roughly 40.8 percent of ordinary revenue, meaning 41 shillings of every 100 collected pays interest before services are funded.

The NTA CEO noted that the debt stock grew from KES 11.8 trillion to KES 13.8 trillion in a single financial year, a KES 1.2 trillion increase, warning that the country is borrowing to pay interest rather than to build productive assets.

EXCLUSIVE INTERVIEW: CPA Cyrus Ondari on Why the Controller of Budget Cannot Block Borrowing

On the sidelines of the coalition meeting, CPA Cyrus Ondari, Deputy Director of Research and Planning at the Office of the Controller of Budget, granted The 254 Report an exclusive interview on the limits of fiscal oversight in Kenya.

Asked about the legal tools his office uses to restrain domestic borrowing, CPA Cyrus Ondari confirmed that the law does not empower the Controller of Budget to block the Treasury. The office operates as a mirror, scrutinizing withdrawals against appropriated line items and reporting to Parliament every four months under Article 228(6) of the Constitution.

CPA Cyrus Ondari placed the debt stock at KES 13.009 trillion as at 30 June 2026, with 56.3 percent domestic and 43.7 percent external, pushing the debt-to-GDP ratio to 69.5 percent against the 55 percent legal anchor. He described the position as near debt distress, noting the economy must grow faster than the debt for sustainability to hold.

The 85 Percent Domestic Borrowing Strategy and the National Infrastructure Fund

In the same exclusive interview, CPA Cyrus Ondari explained that the Medium-Term Debt Management Strategy deliberately targets 85 percent domestic borrowing to shield foreign reserves, given that 54.8 percent of external debt is dollar-denominated. The cost, he acknowledged, is a crowding-out effect: commercial banks now hold KES 2.54 trillion in government securities and prefer risk-free lending to the state over credit to the private sector.

To sustain this strategy, the government is operationalizing the National Infrastructure Fund (NIF), a vehicle designed to allow private capital, including pension funds, to participate directly in financing state infrastructure. CPA Cyrus Ondari also clarified that tracking corporate migration into stablecoins and digital dollar rails falls under the Central Bank of Kenya's mandate, not the Controller of Budget's, meaning the CoB does not track this shift in domestic liquidity.

The Singapore Approach: NTA's Plan for Domestic Resource Mobilization

To address these challenges, Patrick Nyangweso proposed the NTA's Singapore Approach to fix Kenya's fiscal structure:

• Expenditure discipline: Mandatory e-procurement across all 47 counties, zero tolerance for inflated tenders, and every loan tied to a trackable productive asset.

• SME incubation windows: A two to three-year tax grace period for early-stage businesses, mirroring Indonesia and Taiwan, before full compliance brackets apply.

• Regional economic zoning: Specializing counties by comparative advantage in manufacturing, logistics, hospitality, and agro-processing instead of 47 redundant mini-economies.

• Export-driven production: Building foreign exchange earning capacity to service external debt without IMF reliance.

Patrick Nyangweso questioned the planning of mega-projects such as the Nairobi Subway and the SGR extension to Malaba, arguing that infrastructure only creates jobs when surrounded by private sector business hubs. It is not the work of government to fill the markets it builds, the NTA CEO argued, calling for production zones between Naivasha and Malaba so corridors move goods, not just passengers.

The Private Sector Squeeze: 623 Billion Pending Bills and the 800 Shilling Basket

Other speakers at the event highlighted the direct impact on businesses. Stephen Osedo, Head of Policy, Research and Advocacy at the Kenya National Chamber of Commerce and Industry, pointed to KES 623 billion in verified pending bills owed to contractors, some dating to 2014, alongside a Credit Guarantee Scheme performing at barely 4.5 to 6 percent since 2024. Stephen Osedo also noted that consumer purchasing power has dropped significantly, with the average supermarket basket falling from KES 3,000 to KES 800.

Kenya Debt 2026: Questions, Answered

How much is Kenya's public debt in 2026?
Approximately KES 13.8 trillion, or 68.5 to 69.5 percent of GDP, above the 55 percent anchor in the Public Finance Management Act as amended in 2023.

What percentage of Kenya's revenue goes to debt servicing?
71.2 percent of ordinary revenue in FY2024/25, with interest alone consuming roughly 41 shillings of every 100 collected.

Can the Controller of Budget stop government borrowing?
No. In an exclusive interview with The 254 Report, CPA Cyrus Ondari confirmed the CoB's mandate under Article 228 is oversight, authorization of lawful withdrawals, and quarterly reporting to Parliament.

What is the NTA's Singapore Approach?
A national strategy built on expenditure discipline, SME tax incubation, regional economic zoning, and export-driven production to restore debt sustainability without hurting the private sector.

What is the Medium-Term Revenue Strategy target?
Raising the revenue-to-GDP ratio from 14.3 percent to 20 percent by the end of FY2026/27 through base broadening rather than punitive enforcement.

Executive Takeaways for Businesses and Investors

1. Reconcile data systems: eTIMS invoicing must match banking records and M-Pesa statements to the shilling before KRA's automated cross-matching reaches your sector.

2. Prepare for the NIF: Corporate treasuries should prepare for potential regulatory pressure to absorb state debt through the National Infrastructure Fund.

3. Manage pending-bill exposure: Do not borrow heavily against expected government disbursements while KES 623 billion in verified bills remains unpaid.

4. Focus on the down-market: With consumer baskets at KES 800, focus on micro-packaging and affordable staples.