Budget and Appropriations Committee (BAC) Chairperson Samuel Atandi has accused his predecessor Ndindi Nyoro and former President Uhuru Kenyatta of mismanaging the economy in what he claimed will see taxpayers fork out Sh1 trillion in interest on public debt in the financial year starting July 1.
Mr Atandi said the borrowing spree undertaken during Mr Kenyatta administration from 2014 to 2022 has slowed down the economy and affected the country’s ability to finance critical development expenditure.
Addressing a press conference at his offices at the Kenyatta International Convention Centre (KICC), Mr Atandi said the country will for the first time in history spend over Sh1 trillion to pay interest on public debt.
Former president Uhuru Kenyatta.
Photo credit: Pool
“President Uhuru Kenyatta’s administration mismanaged our economy through heavy borrowing and individuals who served in that regime including should not lecturers,” Mr Atandi said.
“I want those who served in the Kenyatta administration to stop tribal bigotry in the sharing of public resources. Mr Nyoro presided over the heavy borrowing during his tenure as BAC chairman,” Mr Atandi said.
Mr Atandi’s outbursts follow Mr Nyoro’s claims that the government is borrowing using fuel tax revenues without House approval.
Mr Nyoro recently claimed that the securitisation of the Roads Maintenance Levy Fund (RMLF) “is the making of a big scandal in Kenya.”
The Treasury recently received about Sh78 billion in short-term financing from commercial banks, backed by the fuel levy collections from motorists.
The Treasury is seeking to raise Sh175 billion annually from the securitisation of the road maintenance levy, which is set at Sh18 per litre of fuel at the pump, to allow the Kenya Roads Board to access the bank financing at cheaper rates.
Mr Atandi said the government has been able to pay at least 40 percent of pending bills owed to road contractors who have now embarked works across the country after abandoning the same.
He said while debt is unavoidable, the country must borrow prudently going forward.
The Alego Usonga MP who took over as the BAC chairperson from Mr Nyoro early this year accused immediate former President Uhuru’s administration “for poor management of the economy especially piling debt without channelling the same to development.”
“For the first time in the history of our country, we are going to spend over Sh1 trillion on interest payment. This is a lot of money that should have been used on development,” Mr Atandi said.
“If Uhuru Kenyatta never mismanaged the economy, we would not be spending Sh1 trillion. Please, be ashamed of yourselves. What did you do with the Sh10 trillion that you borrowed? Mr Nyoro should not throw mud on what this regime is doing because that will be hypocrisy.”
Kiharu MP Ndindi Nyoro.
Photo credit: File | Nation Media Group
Interest payment on debt has since skyrocketed from Sh171 billion in 2014, a year after President Uhuru took over from the late Mwai Kibaki to Sh840 billion in 2022.
“While over the same period, development expenditure remained stagnant at Sh530 billion,” says Mr Atandi.
In the financial year- 2024/25- Kenya spent Sh1.2 trillion on interest repayments for its public debt.
This represents a significant portion of the total debt service obligation which is Sh1.85 trillion, including debt redemption of Sh843.4 billion according to the Institute of Public Finance (IPF).
Kenya’s public debt reached a record Sh11.35 trillion in the wake of increased borrowing by President William Ruto’s Kenya Kwanza administration.
Latest Treasury data showed that the total debt outstanding rose from Sh10.4 trillion in March last year as the government borrowed Sh1 trillion from local banks, insurance funds, and pension schemes.
“While debt is unavoidable. We must borrow prudently going forward,” Mr Atandi said and accused Mr Kenyatta’s administration “for poor management of the economy especially piling debt without channelling the same to development,” Mr Atandi said.
Mr Atandi announced that BAC will undertake massive budget cuts on non-essential areas in the financial year 2025/26 to free up resources for development.
“Beginning tomorrow (Thursday), BAC will be meeting with the chairpersons of Departmental Committees to receive the reports from various ministries, departments and agencies (MDAs) for the financial year 2025/26,” he said.
“I want to assure the country that even as we undertake budget cuts, we will deliver a budget that is equitable, fair and covers all parts of our country. We will not deliver a partisan budget like has been the case where only one region benefited.”
Committees will be presenting their line ministry budgets to BAC for consolidation and tabling in the House for approval.”
