NAIROBI, Kenya, June 12 – Treasury Cabinet Secretary John Mbadi has sounded the alarm over Kenya’s mounting public debt, calling for strict financial discipline, strategic economic planning, and more efficient revenue mobilization to avert a potential fiscal crisis.
While presenting the 2025/2026 national budget estimates in the National Assembly, Mbadi acknowledged the government is operating under constrained fiscal space due to years of rapid debt accumulation.
He emphasized that the country’s debt-carrying capacity has significantly reduced, leaving little room for further borrowing without risking economic instability.
“We face constraints on account of public debt accumulation. Progressively, our debt-carrying capacity has narrowed,” Mbadi told Parliament. “This calls for prudence and discipline on how we manage and take on new debt.”
According to Mbadi, the government must now make difficult but necessary decisions to manage its growing debt burden.
He said this includes streamlining public expenditure, ensuring borrowed funds are channeled toward productive investments, and curbing wastage and mismanagement in public offices.
“These constraints are interlinked and addressing them strategically requires strategic planning, fiscal discipline, and a commitment to long-term sustainability.”
Mbadi noted that while there is a pressing need to raise more domestic revenues to support development and social programs, the Treasury is keen to do so without stifling the private sector.
High taxes, he warned, could deter investment and hurt small businesses, undermining the country’s economic growth objectives.
The Treasury chief emphasized that the 2025/2026 budget has been crafted with a focus on striking this delicate balance. He said feedback from nationwide public forums (barazas) has been incorporated into the budget-making process, ensuring that the voices of ordinary Kenyans are reflected in the fiscal decisions.
Mbadi’s remarks come at a time of heightened scrutiny of government spending and rising public discontent over the cost of living.
Civil society groups and economic analysts have called for a more transparent and accountable budgeting process, urging the government to prioritize essential services like healthcare, education, and infrastructure while eliminating duplicative or non-essential expenditures.
The budget is expected to lay the groundwork for economic recovery following the financial shocks of the past few years.
However, with Kenya’s public debt now standing at over Sh10 trillion, analysts warn that without deep structural reforms and a firm commitment to fiscal responsibility, the country risks falling into a debt trap that could jeopardize its future growth.
