A Hidden Bill: State Firms Owe KSh 62 Billion Without a Guarantee
Key Highlights
- State corporations borrowed KSh 62 billion from commercial lenders without a government guarantee in the year to June, up 38.2 per cent from KSh 44.90 billion.
- Five bodies hold most of it.
- If they cannot pay, the taxpayer can still be called.
State corporations owe commercial lenders KSh 62 billion that the government did not guarantee, and the stock grew by KSh 17.10 billion in a year.
The National Treasury annual public debt report for 2025/26 puts non-guaranteed commercial borrowing at KSh 62 billion at the end of June 2026, up 38.2 per cent from KSh 44.90 billion a year earlier. A guarantee is the promise that the state will pay if the borrower cannot. These loans do not carry that promise.
The Treasury's own warning is that the bill can still reach the public purse if a state firm fails to pay. That is the point for a taxpayer. The loan is not on the official guarantee list, and it is not safely outside it either.
Five bodies account for 81.9 per cent of the exposure. The National Cereals and Produce Board leads, at KSh 13.94 billion. Then come KenGen, the Kenya Airports Authority, the Kenya Forest Service and the Kenya Ports Authority. These are not obscure companies. One buys and stores grain. One generates power.
One runs the airports. One looks after forests. One runs the ports. A lender who cannot collect from any of them has a political case, not only a legal one, for asking the Treasury to step in.
The guaranteed book moved the other way
The loans the government has actually signed for are a different pile, and they shrank. The June debt bulletin put guaranteed debt at KSh 69.85 billion at the end of June, down from KSh 71.02 billion a month earlier. Total public debt was KSh 13.01 trillion, 68.5 per cent of the economy.
The unsecured KSh 62 billion is small beside that stock. It is not small beside a failed maize season or a port bill that a board cannot meet.
The interest on the debt the state has already owned up to is the larger drain. Tax money is budgeted to pay KSh 986.73 billion in local debt interest in 2026/27. The KSh 62 billion sits beside that, unsigned. A household does not get a notice when a cereals board takes a commercial loan.
It meets the cost later, in a supplementary budget, a delayed service, or a higher tax, if the board cannot pay.
In Summary
- How much is unsecured?
- KSh 62 billion, up KSh 17.10 billion from KSh 44.90 billion a year earlier.
- Who holds most of it?
- Five bodies hold 81.9 per cent, led by the cereals board at KSh 13.94 billion.