Nairobi — The International Monetary Fund (IMF) has urged Kenya to expand its official debt statistics to include unpaid government obligations–commonly known as pending bills–in a move that could significantly reshape the country’s fiscal outlook.
In a new technical assessment, the IMF said Kenya’s public debt data is “broadly accurate and timely,” but falls short of international standards due to its narrow scope, which excludes sizeable liabilities across the wider public sector.
“Kenya’s public debt statistics are broadly accurate and timely, but improvements are needed to broaden the scope of public sector debt reporting,” the Fund noted.
At the centre of the recommendation is a stock of pending bills estimated at Sh684 billion as of March 2025–about 4 percent of GDP–covering unpaid obligations owed by ministries, counties and state corporations.
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These liabilities are currently tracked separately but are not included in Kenya’s headline public debt figures, effectively understating the government’s total obligations.
Under the current framework guided by the Constitution and the Public Finance Management Act, public debt reporting mainly captures loans contracted or guaranteed by the national government, as well as Treasury bonds and bills.
However, non-guaranteed borrowing by state corporations, liabilities of extra-budgetary units, and a significant portion of county-level obligations remain outside the official debt scope.
Pending bills–classified as “other accounts payable”–are among the largest omissions despite their impact on fiscal sustainability.
The IMF is now pushing for broader reforms, including incorporating non-guaranteed public sector borrowing, improving debt classification based on creditor residency, and capturing liabilities from public-private partnerships and securitisation arrangements.
Kenya’s public debt stood at about 66 percent of GDP in the 2023/24 financial year, down from 72 percent the previous year, according to official data.
While considered sustainable, the country remains at high risk of debt distress, driven by exchange rate volatility on external debt and rising domestic borrowing costs.
The IMF says including pending bills and other off-balance-sheet liabilities would provide a more accurate picture of Kenya’s fiscal position and enhance transparency for investors, policymakers and rating agencies.
