Debt burden exposes Shilling to exchange rate risks, warns CoB
The Controller of Budget warned that Kenya remains vulnerable to currency risks as 52 percent of its external debt is denominated in US dollars. Any weakening of the shilling against major currencies raises the cost of servicing foreign loans and increases the country's overall d..
✨ Key Highlights
Kenya's mounting debt servicing costs are exposing the nation to significant exchange rate risks, according to the Controller of Budget. The country has spent over Sh1.35 trillion on debt repayments in the first nine months of the 2025/26 financial year.
- Over Sh1.35 trillion spent on debt servicing (Sh763.21 billion domestic, Sh588.85 billion external) by March 2026.
- The Controller of Budget issued the warning.
- 52 percent of Kenya's external debt is in US dollars, making the shilling's weakening costly.
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Public debt up nine percent to Sh12.82tn - June 2026
Kenya's public debt has surged by 9 percent to Sh12.82 trillion as of March 31, 2026, exceeding Parliament's recommended debt threshold. The Controller of Budget reported that nearly half of Kenya's government revenue during the first nine months of the 2025/26 financial year was allocated to servicing public debt, amounting to Sh1.35 trillion. This mounting debt servicing cost is exposing the nation to significant exchange rate risks for the Kenya Shilling. Separately, the Kenya Revenue Authority is preparing to pursue employers who have failed to remit over Sh100 billion in employee deductions for the Affordable Housing Levy.
