The government has unveiled plans to borrow an additional Ksh1.02 trillion to cover the widening budget deficit, raising concerns amid Kenya’s rising public debt levels.

Treasury Principal Secretary Chris Kiptoo announced on Wednesday, noting that the borrowing is part of efforts to maintain fiscal stability as spending pressures grow.

According to Reuters, the planned financing will fill a budget gap equivalent to 4.9 per cent of GDP, slightly higher than the 4.8 per cent recorded in the current fiscal year. 

Treasury revealed that the borrowing will include a net external financing of Ksh241.8 billion (USD1.86 billion) and net domestic borrowing of Ksh775.8 billion.

As of September 2025, Kenya’s total public debt jumped to Ksh12.06 trillion, with domestic debt accounting for roughly Ksh6.66 trillion and external debt around Ksh5.39 trillion.

On Wednesday, Kiharu Member of Parliament Ndindi Nyoro challenged the government's growing borrowing, saying that at the current rate, President Ruto's regime is borrowing over Ksh3 billion a day.

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The developments come at a time when the government has been grappling with growing expenditure demands. As a result, the government plans to use the funds to pay newly hired teachers as well as to hire more teachers. 

The government plans to hire 20,000 intern teachers starting in January 2026 to address the country’s teacher shortage. In May, President William Ruto announced that the government will invest Ksh1.6 billion for teacher training and an additional Ksh1 billion for their promotion.

Additionally, the money will be channelled to fund critical sectors such as health and security adequately, where the government recently recruited 10,000 police officers on Monday ahead of the 2027 General Elections. 

The recruitment of police has generally been on hold for over three years due to budget constraints that have affected the country. 

Kenya had hoped to secure additional support through a new International Monetary Fund programme, which has, however, been delayed, with disagreements arising over the classification of securitised loans.

Meanwhile, PS Kiptoo urged government departments and agencies to adopt financial reforms, including the rollout of an electronic procurement system, aimed at curbing graft and minimising wastage of public funds.