Mbadi defends debt strategy, accuses critics of misleading Kenyans

Treasury Cabinet Secretary John Mbadi defended the Kenyan government's handling of the country's public debt, dismissing claims that Kenya is on the brink of a debt crisis and accusing critics, including some in the media and opposition, of misrepresenting the Treasury's expenditure and debt-management measures. During a press briefing in Kisumu on August 16, 2026, Mbadi stated that the government had taken deliberate steps to prevent default by restructuring debts due in the near future.

He highlighted Kenya's past identification among countries at risk of default but emphasized that they managed to avoid such a situation through effective liability management. "We did not default. It was not a miracle. It was not magic. We just did liability management," Mbadi asserted.

Mbadi pointed out that the government focused particularly on addressing looming external debt obligations, including a 1.5-billion-dollar payment due in May 2027. According to him, not preparing for this repayment could have further strained the economy and weakened the Kenyan shilling. "If you allow yourself to reach December this year without a plan to pay it, the shilling would have been even at 180 to the dollar. That is how it works. It is simple economics," he explained.

When questioned about the use of Article 223 of the Constitution, which the reports suggested was used for significant portions of the reported expenditure, Mbadi clarified that a substantial amount of Ksh86 billion was allocated to managing Eurobond liabilities. He argued that the Treasury acted opportunistically when market conditions presented a favorable window for liability management. "If you are thinking smart, the first thing to do is to move quickly and do liability management. And that’s what we did," he stated.

Mbadi also addressed allegations of billions of shillings spent on opaque security operations, clarifying that this expenditure primarily involved leasing government vehicles, such as police vehicles, which fall under the National Treasury's jurisdiction. He urged journalists to seek clarification from the Treasury before publishing reports on government expenditure.

"What you would have asked as the media was, what is this that is being provided at the National Treasury as a security operation? And I would have responded to you that that is the leasing of police vehicles," he emphasized.

Regarding the overall debt position of Kenya, Mbadi stressed the priority to ensure that the debt remains sustainable while slowing its accumulation. He mentioned that the Treasury has extended the maturity of domestic debt and dealt with near-term external obligations. He also noted improvements in foreign exchange reserves, credit ratings, private-sector lending, and interest rates.

"As far as I am concerned, we are doing our best," Mbadi concluded, challenging critics to offer alternative proposals for economic management.