External debt is money owed to foreign countries, multilateral institutions, and foreign creditors. Domestic debt is the debt owed to commercial banks, pension funds, businesses and individuals within a country. 

Mbadi said half the country’s debt was owed to foreign creditors and the other half to the domestic market.

Kenya’s national treasury publishes annual reports on the public debt. 

The most recent report, dated September 2023, showed that 52.9% of the public debt was external, and 47.1% was internal. 

The trend over five years shows an almost even split.

In addition, the treasury also publishes quarterly reports on the state of the economy. 

The most recent report, dated August 2024, showed an external debt of 48.8% and a domestic debt of 51.2%. 

It is not quite 50-50, but it is "about" right. Mbadi's claim is correct. – Alphonce Shiundu

Mbadi said Kenya was spending three times more on interest to its domestic creditors than to foreign creditors. “I am telling you clearly that our domestic debt is very expensive,” he said. 

The treasury's August 2024 quarterly report showed that in the financial year 2023/24, ending on 30 June 2024, the country spent KSh218.2-billion on external debt interest and KSh622.5-billion on domestic debt interest.

Mbadi was right that the government spent three times as much servicing domestic debt as it did on foreign debt. 

But there are also payments on the principal debt.

In the August 2024 report, a total of KSh756-billion was spent on external debt payments, of which KSh537.8-billion (71.1%) was spent on principal payments and KSh218.2-billion (28.9%) on interest.

Another treasury report on all government expenditure showed that KSh1.6-trillion was spent on public debt for 2023/24.

We know that KSh756-billion or 47.4% of the total debt expenditure was on external debt service, so we can infer that KSh840.6-billion or 52.6% was on domestic debt.

While the interest paid on domestic debt is three times higher than that paid on external debt, the split between total expenditure on the two types of debt nearly matches the debt shares. – Alphonce Shiundu

To ease pressure on public funds, Mbadi said the country needed to reduce "expensive" domestic debt with high interest rates in favour of low-interest multilateral, concessional and bilateral loans with longer maturities.

“The Japanese government gives their loans at about 1%, 1.7%, 1.5% ...  so, even though it is bilateral, it is still cheaper,” the minister said. 

Africa Check asked Prof Hiroaki Shiga of the Graduate School of International Social Sciences at Japan’s Yokohama National University for the best source of data to assess this claim.

Shiga referred us to the Japan International Cooperation Agency (JICA), the country’s global development agency. 

The data shows that Japan offers loans to countries at interest rates of between 0.4% and 2.4%. 

A summary is given below.

Japan's bilateral and multilateral lending rates
Country category	Interest rate	Examples of countries in this category
Low-income least developed country	0.4%	Afghanistan, Rwanda, Ethiopia, Uganda, South Sudan
Low-income country or least-developed country	0.8% to 1.7%	Benin, Nepal, Senegal, Tanzania
Lower middle-income country	0.75% to 2.2%	Algeria, Cameroon, Ghana, India, Kenya, Morocco, Pakistan, Zimbabwe
Upper middle-income country and uppermost middle-income country	0.95% to 2.4%	Malaysia, Gabon, Mauritius, South Africa, Thailand, Turkey

Source: JICA, terms and conditions of Japanese ODA loans, effective 1 April 2024

We therefore rate this claim as accurate. –Tess Wandia

Mbadi also said he was from the country's south-western sugar belt and wanted Kenya to be self-sufficient in sugar production. He said Kenya's sugar deficit has been persistent.

Sugar availability and pricing are politically volatile subjects in Kenya, where many state-owned sugar factories struggle to stay afloat. The high production costs make Kenyan sugar exports expensive, putting local sugarcane farmers at the mercy of cheap imports.

“I am not saying that the (sugar) demand has not been higher than the supply. It has been. We know that, and it has been there; those [are the] statistics,” he said.

Dr Timothy Njagi is a development economist and research fellow at the Tegemeo Institute, an agricultural thinktank. He referred us to the Agriculture and Food Authority (AFA).

Every year, the state agency publishes a yearbook of statistics containing detailed information on various crops, with a focus on agricultural production and market performance. 

Kenya’s statistics bureau also refers to the agriculture authority when reporting sugar production, imports and exports in its annual economic survey.

The authority’s 2024 statistical yearbook reported on the value of sugar imports and production from 2017 to 2023. In an email, Njagi also explained that in developing the balance sheet, the demand side includes production plus imports.

Year	Demand (production + imports) (metric tonnes)	Supply (produced locally) (metric tonnes)
2017	376,111 + 989,619 = 1,365,730	376,111
2018	491,097 + 284,169 = 775,266	491,097
2019	440,935 + 458,631 = 899,566	440,935
2020	603,788 + 442,393 = 1,046,181	603,788
2021	700,241 + 426,334 = 1,126,575	700,241
2022	796,554 + 320,708 = 1,117,262	796,554
2023	472,773 + 608,178 = 1,080,951	472,773

Source: Agriculture and Food Authority, 2024

According to the data, demand for sugar has been significantly higher than supply for the past six years.

Mbadi’s claim checks out. – Tess Wandia