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Government’s Big 4 Agenda Likely to Increase Debt to KES. 1 Trillion

BY Soko Directory Team · April 23, 2018 10:04 am

The pledge by China to support Kenya’s Big 4 agenda for the next five years could just a recipe for Kenya’s financial beating as the country is looking at a debt that will clock 1 trillion shillings by 2022.

The funds from the Asian economic giant is aimed at facilitating better standards of living for all Kenyans; such a bittersweet idea.

China is currently among the top bilateral donors with a cumulative development aid to Kenya standing at 730 billion shillings including grants amounting to 27.9 billion shillings and loans of 702.1 billion shillings.

According to Kamau Thugge, the Principal Secretary in the Ministry of National Treasury and Planning, the big four agenda is costly and the expectation is that some of the funds will come from the government and some from the private sector.

“We are in the process of strengthening our public-private partnership. The government is currently using Chinese credit to construct the Nairobi to Naivasha SGR project, the construction of Nairobi Inland Container Deport yard, Kenyatta University Teaching and Referral Hospital, construction of Kibwezi-Kitui road among other projects,” Thugge said.

The Big Four Agenda was launched in December 2017 by President Uhuru Kenyatta and is focused on addressing many issues affecting Kenyans today.

The Big 4 seeks to increase the share of the manufacturing sector to 15 percent of GDP, guarantee that all Kenyans enjoy food security and improved nutrition by 2022, realize universal health coverage, and provide not less than 500,000 affordable housing units.

Apparently, about 35 Chinese firms have expressed their interests in building the affordable housing. The first phase is already underway.

To further drive the Agenda, the government is looking at maintaining inflation rate within the band of 2.5 percent on either side of the 5 percent target.

This comes as it slows down ministerial expenditure and at the same time implement several initiatives to boost domestic revenue mobilization, strengthening the tax administration by funding it more and expansion of the tax base said The Star.

Other directives put in place to increase revenue to facilitate the government’s Big 4 Agenda include the reduction of state deficit by 3 percent to the GDP by 2021/2022 financial year from the current 9.1 percent of GDP and the nominal public debt on net basis targeted to reduce from the preliminary 51.9 percent of GDP to 43.2 percent in 2022.

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