Trends in the share of Kenya’s Total External and Domestic Public Debt Stock to GDP, across political regimes (1999

Trends in the share of Kenya’s Total External and Domestic Public Debt Stock to GDP, across political regimes (1999 – 2018)

Post date: Thu, May 2, 2019 |

Category: Debt |

Debt management options, among other strategies, entail maintaining a targeted ratio between the external versus internal debt stock. The underlying reasoning behind this strategy is, first, to minimize on the external risks such as fluctuations in the exchange rate in the case of heavy external borrowing and secondly, to minimize on subdued economic activities in the domestic market that may result in the case of heavy domestic borrowing.

Source: Author’s compilation from various sources

Number of the week: 50:51 Domestic to External ratio

Trends in the debt-to-GDP ratios for external and domestic debt as shown above depict a particular pattern.

In the Moi’s regime the average domestic debt-to-GDP ratio was 22% compared to 37.5% external. This implies heavy external borrowing proportion averages 63%
On the other hand, Kibaki’s regime average domestic debt-to-GDP ratio was 22.1% compared to 23.9% external, implying fairly domestic – external balancing. The external proportion averaged 52%, which is 11 percentage points below the Moi’s regime.
In the Uhuru’s regime, the average domestic debt-to-GDP ratio was 25.5% compared to 26.5% external. This implies heavy external borrowing proportion averages 51% implying relatively fair spit.

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