Last week I ran Kenya through a scan of the four warning signs that precede internal conflict; we trip three: high inequality, high debt and weak growth. I argued that the fifth stage, of bad money and bitter conflict, is where we have lived since June 2024. Then I ended with a doubt: I could not remember the good years, and suspected you could not either.
That doubt is a problem for our framework, because its third and fourth stages describe prosperity and then excess, and Kenya has never been prosperous.
Half of us live on less than Sh130 a day. So how can we live in the wreckage of a boom we never had? I looked, and this is my thesis: the boom was real, most of us were never let into it, and what we borrowed against it built nothing that can carry the debt.
In 2002 the economy grew by 0.55 per cent, which is a statistician’s way of saying it did not grow. By 2007 it was growing at 6.85 per cent. In between came free primary education, mobile money, and a stock market that ordinary people entered, most memorably when Safaricom listed in 2008 and applicants got a fifth of the shares they asked for.
Then came the 2010 Constitution, and with it money was devolved to the counties, bringing roads, hospitals and services closer to communities that had spent decades waiting for Nairobi to remember them. You did not have to be rich to feel that decade. The third stage is defined by a direction people can feel in their own lives, rather than an income level, and, measured against ourselves, we were rising. Then came the fourth stage, and ours is easy to date. Public debt was Sh1.79 trillion when Uhuru Kenyatta took office in 2013, Sh8.7 trillion when he left in 2022, and has since passed Sh13 trillion, meaning two administrations added over Sh11 trillion.
That is textbook fourth-stage behaviour: debt growing faster than the income to service it. It never felt like a bubble because the gains stayed at the top. Private wealth climbed while real wages fell, a narrow class took the property, the contracts and the financial assets, and everyone else met the boom through rising taxes and the cost of servicing it. Prosperity enjoyed by a few is still the fourth stage, with fewer beneficiaries and the same bill.
Here is where the framework needs adapting for Africa. The second stage is the boring one, where a country builds the institutions that turn money into productivity people can feel: procurement that works, projects that cost what they should, a public service that spends what it says it spent. We never finished that work, and we borrowed anyway. That is the plainest explanation I have for how we added Sh11 trillion without an economy able to carry it.
Building something that returns more than it costs is how rich countries got rich, and the record on schools, roads and ports is that money spent well repays many times over. But it needs plumbing that turns shillings into output, and we poured money into a half-built system and wondered why so little came out.
The government has securitised the fuel levy, borrowing Sh175 billion against money motorists have not paid at the pump. Roads get built today with revenue that should have maintained them through the 2030s, leaving the next government to fix them with money this one spent. Free education faces a Sh56.3 billion shortfall, so a pupil needing Sh2,330 a year in capitation gets Sh1,096 once the gap is spread, while hospitals wait for claims the insurer may not be able to settle.
We borrow at record cost while defunding the health and education of our people, the two things most likely to make us productive enough to repay.
We cannot print dollars for the Sh5.78 trillion owed abroad, and printing shillings for the Sh7.24 trillion owed at home would destroy every saving held in it. Debt service takes 70 of every 100 shillings collected, which leaves tax. Governments in that position raise taxes and cut spending (ours has continued to spend like we are rich), and where they do that to a society already split by a large wealth gap, the result has often been revolution.
The Finance Bill was that lever, and June 2024 was what happened when it was pulled on people with nothing left to give. The debt itself is survivable; countries have carried worse. What troubles me is what sits beneath it.
A country normally reaches the fifth stage carrying something out of the third and fourth: accumulated wealth, working institutions, a middle class deep enough to take a hit. Those are the shock absorbers, but ours are non-existent. We reach the stress test with nothing underneath to take the weight.
