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Kenya’s finance ministry on Monday said it plans to scale back borrowing from capital markets in the next three years to ease debt repayments. Specifically, the country needs to “focus more on concessional borrowing” while boosting revenue collection.

Like many sub-Saharan African economies, the country has binged on commercial credit in recent years to fund ambitious infrastructure projects aimed at spurring growth and investment.

The result is an increasingly unsustainable debt pile, which stood at around 55% of GDP – up from 40% in 2013. Kenya’s most recent $2.1 billion Eurobond issuance in May was partly to pay off existing debt, with as much of a third of government revenue going towards debt servicing.

In October 2018, the International Monetary Fund upgraded Kenya’s risk of debt distress from low to moderate.

Monday’s statement is an overdue nod to the problem, assuming the government means it.

It comes three weeks after lawmakers approved a proposed increase in the country’s debt ceiling to $85.7 billion, opening the door for another $38 billion on top of existing debt of $56 billion in June, amid plans to borrow $4.1 billion from external lenders.

The finance ministry has already warned that it will take years to scale back borrowing, without providing numbers on how it plans to do so.

Let’s hope this isn’t just lip service.

This report reflects the views of the author alone, not those of How we made it in Africa.

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Is Kenya serious about borrowing less?