Curb rising public debt

As public debt surges past Sh13 trillion, commercial banks and financial institutions are profiting immensely from the situation. They stand to earn billions in guaranteed interest payments, with banks set to receive Sh342 billion in the 2026/2027 fiscal year alone. Additionally, pension funds and insurance companies are expected to reap Sh130 billion each from these interest payments.

The heavy burden of servicing this debt places strain on government resources, as nearly 60% to 70% of revenue is now directed towards debt repayment. This diverts funds away from crucial services like healthcare, education, and infrastructure development, which are essential for national progress. The National Treasury estimates that the total interest payments will reach Sh1.25 trillion in the current financial year, with local financial institutions alone receiving Sh500 billion, accounting for 40% of all interest payments.

This financial strain forces the government to aggressively expand tax measures, placing an additional burden on taxpayers. The situation highlights the need for austerity measures to curb the excessive spending and control the escalating public debt.