Real Reason Why PAC Is Laying Blame for Domestic Debt on Treasury Over KSh 533.7 Billion

The Public Accounts Committee (PAC) has questioned the National Treasury over KSh533.7 billion spent on domestic debt interest during the 2023/2024 financial year.

The committee raised the issue on Thursday, October 29, 2026, while examining the Auditor General’s reports in Naivasha, Nakuru County.

PAC members, led by Butere MP Tindi Mwale, questioned Treasury Principal Secretary Chris Kiptoo over the findings and the rising cost of public debt.

The government spent a total of KSh762.44 billion on interest payments for public debt during the financial year under review.

Committee members called for a national discussion on public debt and sought clarification on the total amount owed by the government.

Dr Kiptoo attributed increased domestic borrowing to limited access to external financing during the 2023/2024 financial year.

He explained that domestic borrowing remained expensive because interest rates were determined by prevailing commercial market conditions.

The Principal Secretary also cited pressure on the Kenyan shilling before the government made a partial repayment of its Eurobond in 2024.

He told the committee that domestic debt currently accounts for 57 per cent of public debt, while external debt represents 43 per cent.

However, Dr Kiptoo said domestic interest rates had declined, helping to lower the government’s borrowing costs.

He further revealed that half of every shilling collected by the Kenya Revenue Authority goes towards paying interest on public debt.

The Treasury official welcomed the committee’s proposal for a national discussion on the country’s debt burden.

PAC members also questioned the Treasury over pending bills, which they said stood at KSh175 billion.

Dr Kiptoo said historical pending bills had previously reached KSh255 billion, but the government had paid KSh80 billion.

He added that Cabinet had approved payment of the remaining bills, with the process expected to begin within two weeks.

The committee also raised concerns over delays in exchequer releases, prompting the Treasury to explain the status of its disbursements.

Dr Kiptoo maintained that the Treasury was up to date with payments to county governments, state departments and state agencies.

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