Kenya’s roaring appetite for both domestic and foreign loans seems to be rising with each passing day and now eating into the economy.
Stats now show that for every 100 shillings Kenyans paid as revenue between the month of July and September, 47 shillings went payment of debts.
Data from the National Treasury indicates that 47 percent of the revenue collected between July and September went to settling some of the domestic and foreign loans.
A total of 153 billion shillings went to settling of debts during the three-month period. This was an increase from 75.3 billion shillings that was used to pay debts at the same time in 2017.
The Kenya Revenue Authority (KRA) collected a total of 329 billion shillings in the three months under review, a 3.7 percent increase from 317.4 billion shillings.
During the three months, only 22.6 billion shillings went to development projects across the country, 14 percent of which went to settling debts for suppliers and contractors.
In the month of June, Kenya’s debt stood at 5.04 trillion shillings before moving to 5.1 trillion shillings in September. The debt is expected to hit 5.6 trillion shillings by the end of 2018. According to the National Treasury, Kenya’s public debt will hit 7.17 trillion shillings by the year 2022.
Kenya’s debt has been ballooning with each passing day with government’s appetite to borrow raising eyebrows and concerns from both the International Monetary Fund (IMF) and the World Bank. A week ago, the IMF warned Kenya of being at risk of defaulting loans after it emerged that the country had breached debt service to export ration.
President Uhuru Kenyatta, while speaking to an international media, said that the loans from China do not ‘scare’ him because they are being put to good use. Apart from the choking taxes, Kenyans have also to foot the country’s debts, most of which goes to individual’s pockets.