Mbadi tells Senate that publicly guaranteed debt stands at about Sh12.842 trillion

National Treasury Cabinet Secretary John Mbadi has told the Senate that the stock of public and publicly guaranteed debt stood at about Sh12.842 trillion (equivalent to 69.49 per cent of GDP) as at end of February 2026.

Mbadi who appeared before the Senate plenary to answer questions, revealed that the public debt comprises a mix of domestic debt of Sh7.063 trillion and external debt Sh5.779 trillion in response to a question asked by Kisumu Senator Tom Ojienda.

The Cabinet Secretary told Senators that External debt composed of Sh3.088 trillion in multilateral debt accounting for 53 per cent of the total external debt with IDA concessional loans comprising Sh1.705 trillion (55.2 percent of the multilateral debt).

“ We have Sh0.984 trillion in bilateral debt, representing 17 per cent of the total external debt, of which China accounts for Sh0.615 trillion (62.5 per cent of bilateral debt) and Sh 1.633 trillion in commercial debt, making up 25 per cent of the total external debt, with the Eurobonds constituting Sh 1.424 trillion (87.2 per cent of the commercial debt),” said Mbadi.

He told the Senate that Kenya's Domestic debt composed of Sh5.739 trillion in Treasury-bonds representing 81.25 per cent of the total domestic debt while Sh1.155 trillion in Treasury-bills making up 16.35 per cent of domestic debt.

The Cabinet Secretary told Senators that 0.169 trillion in other domestic debt accounts for 2.39 per cent, which includes overdraft from Central Bank of Kenya, IMF funds on-lent to Government, and Bank advances.

Senator Ojienda sought to know measures in place to ensure that funds raised through borrowing are utilized effectively and translate into tangible development outcomes across the Country.

“The Government committed to efficient use of all funds obtained through public borrowing. In this regard, the national treasury has implemented several measures to ensure that expenditures from borrowed funds contribute to meaningful development national wide,” said Mbadi.

He told the house that the measures include creating an enabling Legal Framework with Article 201 (b) of the Constitution of Kenya emphasizes inter-generational equity, requiring that the benefits and burdens of resources raised through public borrowing are shared between the current and future generations.

 Mbadi said that Section 15(2) of the Public Finance Management (PFM)Act CAP 412 A mandates the  national government borrowing to be solely used for financing development expenditures with the Government  committed to complying with these legal provisions.

He told the house that the National Treasury has established effective Public Finance Management systems, including the Integrated Financial Management Information Systems (IFMIS).

 “This system ensures that funds, including borrowed resources, are used as appropriated by the National Assembly and for the designated purposes, it enhances accountability through real-time tracking, reporting and a verifiable audit trail of expenditures,” said Mbadi.

The Cabinet Secretary told Senators that the Government has implemented Programme Based Budgeting (PBB), embedded in the Medium-Term Expenditure Framework (MTEF).

Mbadi said that the Programme Based Budgeting links appropriated funds to specific outputs and outcomes, establishing a performance measurement framework.

He said this approach facilitates monitoring of progress, reporting and provides feedback to inform policy and decision making, ensuring that borrowed funds lead to tangible development outcomes.

Nominated Senator Catherine Mumma sought to have the status update on the adoption of the Electronic Government Procurement System(e-GP) across national and County government entities.

“Article 227 of the Constitution, requires a system that is fair, equitable, transparent, competitive and cost-effective, in compliance with Article 227 of the Constitution, Parliament enacted the Public Procurement and Asset Disposal Act, 2015 (the Act) with its attendant Regulations 2020,” said Mbadi.

Senator Mumma sought to know how much the Government has saved so far by transitioning to E-GP Kenya and whether there has been an  improvement in the efficiency of procurement processes since the transition.

Mbadi said there is no verified figure for total savings realized from the e-GP roll out yet, as the system is in the initial phase of take-off with the numbers in most public sources remaining projections or anticipated savings, not confirmed by independent audits.

However, Mbadi said there are several qualitative and structural improvements reported so far, in terms of reduced procurement cycle time, greater transparency, tighter integration with financial tax systems, and built-in audit trails.

“What steps has the Government taken to address the factors undermining the success of e-GP Kenya, among them, the limited capacity and resistance among procurement officers as well as the lack of adequate information, Communication and

Technology infrastructure and internet connectivity, particularly in the rural areas,” asked Mumma.

Mbadi said that the National Treasury has deployed 269 "Trainers of Trainers" to guide procurement officers across national and county governments with over 2,000 procurement officers having already undergone hands on training and a further 15,000 are undergoing virtual training via webinars.

He told the house that a technical  support centre has been set up to assist users navigating the system at the KISM Towers, along Ngong Road in Nairobi with the National Treasury having partnered with the Kenya School of Government to deliver countrywide training for PFM officers and other stakeholders.

“What measures has the Ministry put in place to mitigate against service delivery interruption during the transition period, particularly in health facilities, schools and other entities offering critical services,” asked Mumma.

Mbadi said that the National Treasury did issue a public notice ahead of the roll-out, informing all suppliers, contractors and consultants about the e-GP launch, with clear instructions to register and use the system.

He said that in that notice, the National Treasury emphasized that only procurements processed through e-GP will be sanctioned and paid for going forward, which signaled a firm push to have entities comply rather than revert to the manual systems.

 enyarangi@standardmedia.co.ke