Last week’s news was awash of a ballooning public debt and risk of our economy being burdened, if Kenya continued with her bad habit of over borrowing. In the last five years since the rise of President Uhuru Kenyatta, Kenya has had unprecedented level of debt. The debt increase has been caused by the widening budget deficit.
To all concerned citizens, this debt elicits questions. Is our government too ambitious or wasteful? To be prudent is to bite what you can chew, but, is the government putting a heavy burden on Kenyans shoulders? So far, critics of Jubilee government are seated pretty waiting for the public debt to suffocate Kenya’s economy since the government is not taking advice or warnings.
In the history of states, there is no single state that has never relied on debt. Even the strongest of world economies borrow, but, there is a difference between our borrowing and that of other states. We borrow too much money but never see or feel the impact of the loans. Kenyans from far and wide are asking how these loans are spent. Do we borrow to ‘eat’ or invest? Do we have a return on investment so far?
Our Public Finance Management systems ought to be made tighter. Do we have a public debt management office? It is this office that should be informing Kenyans how much money is borrowed and how it has been invested.
Do you remember the long and sometimes incoherent stories about the Eurobond? Money was borrowed and none can point the projects that were financed by the Eurobond loan. It is a question that shall be asked many years to come. Was the money used on infrastructure or recurrent expenditure? If it was used on recurrent expenditure was that a wise thing for the government to do?
There is a predictable obsession with the Eurobond loans by African governments which fear accountability. One salient thing is that, this type of loan doesn’t come with conditions and therefore governments can use the funds acquired in any way that they deem fit. Could Kenya be sharing the same story? Is that the reason as to why the 2014 Eurobond cannot be ‘accounted’ for, shilling by shilling?
To save Kenya from the huge public debt, the country needs to embrace strategies to enable government to make money locally and carry out a number of austerity measures.
To date Kenya has an imbalanced trade with other countries, we import more than we export. For instance in 2017 we imported goods worth 17.1 billion dollars and only exported goods worth 5.72 billion dollars. This whopping deficit is worrying. We buy a lot and sell too little.
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