IMF Urges Kenya to Include Pending Bills in Public Debt Data

Nairobi — The International Monetary Fund (IMF) has urged Kenya to expand its official debt statistics to encompass unpaid government obligations, commonly referred to as pending bills. This recommendation could significantly alter the country’s fiscal outlook. In a recent technical assessment, the IMF acknowledged that while Kenya’s public debt data is “broadly accurate and timely,” it does not meet international standards due to its limited scope, which excludes substantial liabilities across the broader public sector.

The IMF highlighted that pending bills, estimated at Sh684 billion as of March 2025—approximately 4 percent of GDP—represent unpaid obligations owed by ministries, counties, and state corporations. Currently, these liabilities are tracked separately and are not included in Kenya’s headline public debt figures, which results in an understatement of the government’s total obligations. The existing framework, guided by the Constitution and the Public Finance Management Act, primarily captures loans contracted or guaranteed by the national government, along with Treasury bonds and bills. However, it fails to account for non-guaranteed borrowing by state corporations, liabilities of extra-budgetary units, and a significant portion of county-level obligations.

Pending bills, classified as “other accounts payable,” are among the largest omissions despite their considerable impact on fiscal sustainability. The IMF is advocating for broader reforms, which include incorporating non-guaranteed public sector borrowing, enhancing debt classification based on creditor residency, and capturing liabilities from public-private partnerships and securitization arrangements. According to official data, Kenya’s public debt was approximately 66 percent of GDP in the 2023/24 financial year, a decrease from 72 percent the previous year. While this level of debt is considered sustainable, the country remains at high risk of debt distress, primarily due to exchange rate volatility affecting external debt and increasing domestic borrowing costs.

The IMF asserts that including pending bills and other off-balance-sheet liabilities would provide a more accurate representation of Kenya’s fiscal position. This change would enhance transparency for investors, policymakers, and rating agencies, ultimately contributing to a more robust financial framework for the country.