Half of every shilling KRA collects goes to interest, Treasury PS tells MPs probing KSh533.7bn domestic debt bill

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Kenya paid KSh533.7 billion in interest on domestic debt in the 2023/24 financial year, out of total public debt interest of KSh762.44 billion, and Treasury Principal Secretary Chris Kiptoo told MPs that half of every shilling collected by KRA now goes to interest, Capital FM reported on October 29, 2026.

What the Public Accounts Committee asked

The Public Accounts Committee (PAC), chaired by Butere MP Tindi Mwale, raised the interest bill while examining the Auditor-General’s reports for 2023/24, and called for a national conversation on public borrowing.

Key figures from the session

Why domestic interest was so high

Kiptoo said the government leaned on local borrowing because access to external financing was limited at the time, and that domestic rates were set by market conditions. He noted the shilling was under pressure before the partial Eurobond buyback in 2024. Domestic interest rates have since fallen, which he said has cut borrowing costs. Lower T-bill yields affect savers too; our T-bill interest calculator shows current returns.

Pending bills to be paid

MPs put pending bills at KSh175 billion. Kiptoo said historical bills had reached KSh255 billion, KSh80 billion has been paid, and Cabinet has approved payment of the rest, with the process expected to start within two weeks. Suppliers owed money should watch for the Treasury’s verification and payment schedule. Pending bills also feature in the coming mini-budget; see Treasury’s first 2026/27 supplementary budget.

On Exchequer releases, Kiptoo said the Treasury is up to date and that counties, state departments and agencies are not owed money by the Exchequer.

Why it matters

When interest absorbs about half of tax revenue, less is left for development, salaries and services, and pressure grows to raise taxes or cut spending. That pressure is rising: the Treasury has just cut its revenue projections as KRA falls behind target; read Treasury cuts 2026/27 revenue target.

FAQ

How much interest does Kenya pay on domestic debt?

KSh533.7 billion in 2023/24, according to the Auditor-General’s report examined by PAC.

What share of Kenya’s debt is domestic?

57%, with external debt at 43%, according to PS Chris Kiptoo.

When will pending bills be paid?

Kiptoo said Cabinet approved payment and the process should start within about two weeks of October 29, 2026.

Updated October 31, 2026.