Kenya’s Public Debt on a Sustainable Path Amid Economic Challenges, Treasury PS

Despite the recently released Sub-Saharan Africa Outlook report by the International Monetary Fund (IMF) that noted Kenya is at a debt risk, Kamau Thugge, the principal secretary, Treasury says that the country’s public debt is sustainable despite the slow economic growth.

According to Thugge, the famous handshake and the state’s commitment to the reduction of public debt has significantly contributed to the growth of the Gross Domestic Product (GDP).

He noted that the efforts are quite commendable considering the declining rate of public debt.

“We are hopeful that by the end of 2018, the country will have realized a 6 percent growth of the GDP, which is promising with regards to the economic growth,” he said.

IMF, in its report, said that Kenya and Uganda may fail to manage their debts if they don’t implement appropriate policies of combating the issue. The institution said that Kenya requires a strong capacity to make a conclusive analysis on the borrowing options and how they can manage the loans.

Speaking during the introduction of public finance and tax conference in Mombasa, the Treasury PS said that Kenya has strong buffers in place that will safeguard the economy. He pointed out that the manufacturing, infrastructure, and agricultural sector are the driving forces of the Big 4 Agenda.

He also banked his sentiments on the country’s efforts to tap on the blue economy to help propagate and spur bold economic growth. Thugge claims that the untapped potential that lies with the maritime sector remains as a substantial foundation for sustainable development, which is why the government is looking to grow the agricultural sector by 5 percent and the manufacturing sector by 3 percent by the end of 2018.

Dennis Osodo, the vice chairman of the Institute of Certified Public Accountants of Kenya (ICPAK) that organized the event, said that the government still has a lot to do in terms of improving how revenues are collected.

He noted that proper models that do not harm the public need to be adopted to ease their burden of the high cost of living.

Osod said that the tax theories should be revisited in order to make sure that revenue collection and the economic growth are balanced, and the only way the government can achieve that is by expanding the revenue base but not frustrating the common citizen through the taxation of their basic needs.