CBK defends high borrowing

NAIROBI, Thursday

Central Bank of Kenya Governor Njuguna Ndung’u has defended increased Government domestic borrowing saying it is aimed at stimulating economic growth and will not choke lending to the private sector. Ndung’u said money borrowed locally will be spent on public projects, such as infrastructure, and that will boost the overall economy. "These projects even when fi-nanced from domestic borrowing do not crowd out the private sector, they crown in, they create complementary avenues to private investments and actually enhance the profitability of the private investments," Ndung’u said in an email. He added domestic credit to the private sector has remained at around 80 per cent and he did not expect this to change significantly. Finance Minister Uhuru Kenyatta unveiled an Sh866 billion spending plan on Thursday for the fiscal year starting in July.