Kenya's increasing reliance on domestic borrowing, now exceeding 54 percent of its total public debt, is sparking debate about its impact on the economy. The government's strategy shifts capital away from private sector growth, raising concerns about sustainability and governance.

• Domestic debt now constitutes over 54% of Kenya's total public debt, estimated at Sh11.8 trillion as of June 2025.
• The Institute of Public Finance (IPF) is a key organization analyzing this trend.
• Domestic borrowing is significantly more expensive, with an average interest rate of around 12%, compared to concessional external loans, and risks "crowding out" private sector investment.