Choking in Debts As Appetite to Borrow Continues to Roar

Kenyans seem to have a unique and roaring appetite for debts. Despite the numerous assurances from the government that they will cut down their love for debts, behind the curtains, it is the business of the day.

Kenya is now choking in debts, both domestic and foreign and our leaders seem to have no plans of stopping soon.

Our biggest lenders, the World Bank and the Chinese, are competing on who will give us the largest amount. Few months ago, the Chinese were leading. We owed them 72 percent of our overall debt.

The World Bank could not let the Chinese enjoy the glory of being our largest lenders. It gave us more and now it has overtaken the Chinese.

Stats from the National Treasury shows that in a period of three months, the country had taken a total of 54 billion shillings from the World Bank.

The country now owes the World Bank a total of 581 billion shillings ahead of China’s 557 billion shillings. According to the stats, both the World Bank and the Chinese account for 20 percent of Kenya’s total public debt.

As the country ‘strive’ to balloon the foreign debt, the domestic debt is also skyrocketing and has now moved beyond the target.

At the end of June 2018, domestic debt has hit 273.7 billion shillings, 25 billion shillings more than what the Treasury had targeted. The Treasury had targeted to borrow 248.7 billion shillings from the domestic market after revising it downwards from 279.5 billion shillings.

Domestically, the government borrows from commercial banks as well as other financial institutions. The government now owes local banks 124.3 billion shillings, other financial institutions 172.8 billion shillings and 3 billion shillings from foreigners.

Kenya’s debt now stands at 5 trillion shillings with the International Monetary Fund has already raised an alarm saying the debt might be unmanageable. The government plans to cut down on borrowing by increasing taxes for Kenyans among them imposing 16 percent Value Added Tax on fuel.