The national government’s external and domestic borrowing has in the recent past elicited mixed reaction.
Statistics from the Treasury indicate that Kenya’s public debt has been growing at an average of 20 per cent for the last five years and now stands at Sh3.6 trillion, representing a 54 per cent of Gross Domestic Product(GDP).
Kenya’s Eurobond debut which generated $2 billion increased the taxpayers’ debt burden. Conversely, Kibaki regime borrowed Sh738 billion during its five-year rule, between 2007 and 2013.
In the recent past, Parliament gave the National Treasury a go-ahead to increase its borrowing from Sh1.2 trillion to sh.2.9 trillion in order for the Government to achieve its development goals.
Whereas the Government would like to achieve its Vision 2030, it is imperative to be cognisant of the fact that one man’s meat is another man’s poison.
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Kenya’s economy has been performing dismally over the past few years and this can be attested by free fall of the shilling against the dollar in the recent past.
Unemployment has reached unacceptably high levels while the cost of living has risen astronomically due to inflation and unfriendly tax regime.
In a nutshell, the Treasury has confirmed that the management of public debt as one of the risks that the economy is currently exposed to.
The national government’s proclivity to spend taxpayers’ money on white elephant projects has made it to operate in the red.
Moreover, the ballooning public wage bill and graft have become a millstone around the Government’s neck.
The fact that a borrower is always a slave to the lender should make us think twice. The unprecedented cost of living experienced across the country is economically unhealthy.
The time to reduce public debt to GDP ratio of below 50 per cent is now.
Joseph Muthama
