By Afrireport 
Treasury Cabinet Secretary John Mbadi has mounted a strong defence of the government’s management of Kenya’s public debt.
He insisted that decisive and timely interventions spared the country from a potentially catastrophic sovereign default.
Amid mounting public concern over rising debt levels, Mbadi spoke. He addressed cost of living pressures. Mbadi said the government inherited a fragile fiscal position. This position is marked by heavy external obligations. It is also characterized by shrinking revenues and tight global financial conditions.
According to the Treasury boss, failure to act swiftly would have pushed Kenya into default. This would have had far reaching consequences for the economy. It would also affect ordinary citizens.
Mbadi explained that the government prioritised debt restructuring. They also actively engaged with international creditors. Strict expenditure controls were essential to stabilise the situation.
He noted that Kenya faced a critical test. This occurred when large external debt repayments became due. It was also a time when access to affordable credit had significantly narrowed. These challenges were due to global economic shocks.
Default was not an option,” Mbadi said, adding that missed payments would have triggered currency depreciation, capital flight, and a sharp rise in the cost of basic commodities. He argued that such a scenario would have deepened unemployment and undermined essential public services.
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The Treasury CS defended controversial measures, including tax reforms and spending cuts, saying they were necessary to restore confidence in the economy.
While acknowledging the pain felt by households and businesses, Mbadi maintained that short term sacrifices were unavoidable to secure long term economic stability.
He further pointed to Kenya’s successful servicing of key external obligations as evidence that the strategy was working.
Mbadi said continued engagement with development partners and multilateral lenders had helped ease pressure on foreign exchange reserves and stabilise the shilling.
However, the government’s debt strategy has continued to attract criticism from opposition leaders and civil society groups, who argue that ordinary Kenyans are bearing the brunt of fiscal adjustments.
Critics have questioned transparency in debt negotiations and warned that high taxation could slow economic growth.
In response, Mbadi said the Treasury remains committed to openness and accountability, promising that future borrowing would be guided by sustainability and value for money considerations.
He reaffirmed the government’s pledge to gradually reduce debt vulnerabilities while supporting economic recovery.
Mbadi’s remarks underscore the high stakes balancing act facing the government managing debt pressures while keeping the economy afloat and public confidence intact.
