That the Jubilee administration was seeking another Sh368 billion from China to extend the Standard Gauge Railway (SGR) from Naivasha to Kisumu had elicited mixed reactions among Kenyans. Last year, the Government borrowed Sh100 billion to pay off two syndicated loans, which left may Kenyans with a bitter taste in their mouths.
As we speak, the Government owes domestic and foreign creditors Sh5.4 trillion as per a report by the National Treasury. Last year’s record indicated Kenya owes China Sh620 billion and the debt continues escalating.
Kenya’s worsening public indebtedness, expected to hit more than Sh5.6 trillion by June and about Sh7 trillion by 2022, is disheartening. Last June, the country’s national debt stood at Sh5.1 trillion, out of which Sh2.5 trillion was domestic debt. Kenya’s ballooning public debt has reached alarming proportions, piling pressure on taxpayers.
Whereas Treasury CS Henry Rotich has assured Kenyans the current debt remains sustainable, the International Monetary Fund has reservations on the country’s GDP-Debt ratio, which now stands at 55 per cent.
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In fact, IMF has intimated that borrowing is raising fiscal vulnerabilities and increased interest payments. While there is nothing wrong with borrowing, the truth is the borrower is a slave to the lender, and the public wage bill has become a millstone around the Government’s neck.
In as much as the national Government would like to achieve the Big Four agenda, the Vision 2030 and UN Sustainable Development Goals, it is imperative that it is cognizant of the fact that many Kenyans are operating on shoe string budgets due to various challenges, including the drought. Eruption of corruption in the national and county governments and mismanagement of public funds have exacerbated public indebtedness.
Austerity and prudent management of resources have gone to the dogs, and no one cares. It is in the public interest that public borrowing be proportionate to national growth and development. Otherwise, future generations and history will harshly condemn the current crop of leaders.
