Kenya’s Debt Crisis: How Workers Are Paying the Price
Kenya’s mounting debt is no longer just a macroeconomic concern—it’s hitting workers where it hurts most: their payslips. But here’s where it gets controversial: while the government argues borrowing is necessary to fund development, critics claim it’s a bandaid solution that’s squeezing the very people it’s meant to serve. With public debt nearing Sh12 trillion, the strain is undeniable. For the 2024/2025 fiscal year alone, a staggering Sh1.85 trillion has been earmarked for debt servicing—money that could otherwise fund schools, hospitals, or infrastructure.
And this is the part most people miss: for every Sh100 the government collects, only Sh40 is left for operations, salaries, and development. The rest? It’s swallowed by debt repayments. This grim reality has forced the government to tap into workers’ pockets through higher taxes and increased deductions. Payrolls are bearing the brunt, with new levies like the 1.5% housing levy and 2.75% SHIF contributions eating into take-home pay. Even contributions to the National Social Security Fund (NSSF) have doubled, with high earners now paying up to Sh4,320 monthly.
The impact is devastating. Auditor General Nancy Gathungu revealed that thousands of civil servants are taking home barely a third of their pay. Police officers, judiciary staff, and healthcare workers are among the hardest hit. For instance, 36,660 police officers now earn less than a third of their salary. Is this fair? Many argue that essential workers are being punished for a debt crisis they didn’t create.
Economists warn the situation could worsen. By June 2027, debt obligations are projected to soar to Sh2.47 trillion. Kitui Central MP Makali Mulu, an economist himself, paints a bleak picture: “Payslips will continue to shrink unless the economy grows fast enough to bridge the gap.” Civil servants, teachers, and public workers—especially those servicing mortgages—face a double whammy: higher taxes and the need to pay for private services due to public sector shortfalls.
But here’s a thought-provoking question: Is borrowing the only way to finance development, or is Kenya trapped in a cycle of debt that prioritizes creditors over citizens? Oxfam Kenya argues the latter, warning that unsustainable debt is stifling growth and diverting funds from essential services. Meanwhile, experts suggest cutting government spending, improving tax administration, and restructuring debt as more viable solutions.
As the government rolls out measures to stabilize revenue, one thing is clear: the average Kenyan worker is bearing the brunt of this crisis. Disposable income is shrinking, and the pressure on households is mounting. What do you think? Is Kenya’s debt strategy fair, or is it time for a radical rethink? Share your thoughts in the comments—let’s spark a conversation that could shape the future of Kenya’s economy.
