The Kenyan government is using 1.94 billion shillings daily to service both domestic and external debts signaling tough times ahead for the already squeezed taxpayer.
As the Kenyan debt continues to balloon beyond manageable levels, it has emerged that Kenyan debt payment spiked by 75 percent in a period of nine months to March 2019.
There have been rising concerns of Kenya’s appetite for borrowing with both the International Monetary Fund (IMF) and the World Bank raising red flags. The government, however, has insisted that Kenya is “still within the borrowing range.”
In nine months to March, the Treasury used 538.20 billion shillings to pay off debts. This was a sharp rise from 273.64 billion shillings recorded during a similar period in 2018.
Breakdown by Business Daily shows that the Treasury, during the period, used 1.94 billion shillings daily, an equivalent of 59.8 billion shillings monthly to service debts.
The government is spending a big chunk of revenue collected to pay debts as compared to that allocated to developments. During the period, the government used 197.16 billion shillings only for development with analysts saying things are soon moving from bad to worse.
More Debts Coming
Even as Kenyans struggle to pay the existing debts, more are on the way coming. The piling debts are likely to spill over to future generations who will still be paying what the current generation is using.
Currently, President Uhuru Kenyatta and his ‘brother’ Raila Odinga are in China to secure a loan of 368 billion shillings for the extension of the Standard Gauge Railway (SGR) to Kisumu.
If China will grand the loan, Kenya’s SGR will be the most expensive in the world with China maintaining her position as the largest lender to Kenya. At the moment, Kenya owes China more than 700 billion shillings in debts.
There are fears that China might be forced to take over some strategic assets within Kenya such as the Port of Mombasa if Kenya defaults in paying the existing loans.
The Land of the Corrupt
Kenya is the land of the corrupt. Kenyans lose more than 1 trillion shillings annually to corruption, that is, a third of Kenya’s national budget. As at the start of 2019, Kenyans had lost 6.6 trillion shillings to corruption.
Kenya’s public debt is currently at 5.6 trillion shillings. This means that the money that the corrupt have looted is more than what Kenya owes in terms of debts.