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Kenya owed China at least Sh653.1 billion in outstanding debt by end of 2024-2025 financial year, official data shows, as the Asian country remained the biggest lender by country.

This was followed by France at Sh101.4 billion after going up from Sh96.7 billion in 2024, Japan (Sh88.9 billion up from Sh80.5 billion) and Germany at Sh56 billion up from Sh43.2 billion, closing the list of key lenders to Kenya in bilateral arrangements.

Nevertheless, domestic borrowing accounted for the lion’s share of the country’s debt last year, the Economic Survey 2026 shows, with total internal debt closing the year at Sh5.98 trillion up from Sh4.88 trillion. This was mainly Treasury Bills (Sh5.1 trillion) and T-bills (Sh1 trillion).

Multi-lateral institutions accounted for the biggest source of external borrowing, with total outstanding debt closing at Sh3.04 trillion last year up from Sh2.8 trillion the previous year.

Most of these monies were owed to World Bank’s International Development Association (IDA) and International Fund for Agricultural Development IFAD) which Kenya owed Sh1.7 trillion, up from Sh1.56 trillion.

African Development Fund/AfDB’s debt stood at Sh550.2 billion, having increased from Sh508.5 billion the previous year. That of IMF was Sh478.8 billion up from Sh421.2 billion, even as the government continued to honor its debt obligations.

That of international sovereign bonds closed the year at Sh1.02 trillion up from Sh854.9 billion the previous year.

According to the Economic Survey 2026, total national government outstanding at the end of the 2024-2025 financial year stood at Sh11.39 trillion, up from Sh9.95 trillion in 2024.

National government net debt servicing obligations exhibited an upward trend over the period 2021-22 to 2025-26, with net servicing expected to rise by 33.4 per cent to Sh2.28 trillion in 2025-26.

“The increase is largely driven by a rise in domestic debt servicing, which is expected to expand to Sh 1.42 trillion in 2025-26 from Sh1.14 trillion in 2024-25,” KNBS says.

External debt servicing is also expected to increase from Sh579.0 billion to Sh860.5 billion, over the same period. On the other hand, interest and loan repayment receipts are expected to decline to Sh2.5 billion in 2025-26 from Sh8 billion in 2024-25.

The country’s total debt stood at Sh12.4 trillion as of January this year, comprising of Sh6.8 trillion domestic and Sh5.5 trillion external.

The government projects a revenue generation of Sh3.38 trillion for financial year 2025-26, encompassing both ordinary revenue and grants, much of it going to debt repayment and recurrent expenditure.