Kenyans have an appetite for loans, from the Government to the common mwananchi. This can be attested by the number of shylocks, Mobile loan facilities, failing banks and mushrooming credit bureaus.
The recent report by controller of budget is an alarming signal that each Kenyan owes the world Sh79,000, thanks to Jubilee’s borrowing spree that has heaped an additional Sh17,000 debt in a year for their mega-infrastructural projects costing billions of shillings.
President Uhuru Kenyatta’s administration borrowed Sh680 billion between December 2014 and December 2015, according to a new report by the Controller of Budget. The amount borrowed in one year is slightly more than half of all the country’s revenue for the current financial year.
The report warns that if the country does not raise enough revenue, there is a risk development goals would be missed because the bulk of the money will go into debt repayment, leaving nothing for infrastructure, schools and hospitals. In the half-year report for the current financial year, Controller of Budget Agnes Odhiambo said Sh230 billion was borrowed from the local market while another Sh450 billion was borrowed from the foreign market.
The extra debt burden was incurred in 12 months in 2015 as the Government grappled with public questions about the use of borrowed money, especially the $2 billion (Sh200 billion) Eurobond money.
The report says the Sh680 billion borrowing pushed public debt to Sh3.16 trillion in December 2015, up from Sh2.48 trillion in December 2014. A fortnight after President Kenyatta’s State of the Nation address, which said the economy was growing, the Controller of Budget cited that KRA is complaining about a “decline in economic activities” in the country as being responsible for the low revenues, and the consequent pressure on Government resources to pay off debt.
The report also indicts the Government’s policy to freeze employment and any wage increases as one of the reasons for low tax revenues. With the growing debt, the Controller of Budget has now warned that the country has to be careful, or else paying back the money at a time when the KRA is missing revenue targets will be a very huge challenge for Kenya.