By Getrude Matayo
According to the recent report released by COB, Kenya borrowed an average of 2.43 billion shillings every day last year and paid commitment fees on loans yet to be disbursed or planned for, pushing total debt to Sh6.69 trillion as at June 30.
According to the COB, Treasury grossly violated the debt management procedures to pile unnecessary debts that will see taxpayers pay dearly.
The government of President Uhuru Kenyatta has multiplied public debt almost four times since it came to power in 2013 when the country’s total public debt was only at 1.6 shillings trillion.
According to Margaret Nyakang’o’s office, project planning and approval should precede sourcing for funds. It added that borrowing can only be done when a program or activity is already scheduled to commence.
Disaggregation by external and internal debt reveals that the former grew by 492.67 billion shillings while the latter grew by 393.1 billion shillings.
The report noted that review of the external debt payments shows instances where the government continued to pay regular loan commitment and management fees for loans that were yet to be disbursed long after the execution of loan agreements
There was a decline in repayment compared to 2018-19 when two commercial loans amounting to 179.3 billion shillings became due despite the growth in the total loan portfolio.
During the year, the actual expenditure of public debt amounted to 717.65 billion shillings under review, representing 92.1 percent of the revised gross estimates and 45.6 percent of the ordinary revenue for the year.
The revised allocation towards repayment of public debt in 2019-20 amounted to 778.85 billion shillings representing a decline of 8.2 percent from Sh848.3 billion allocated in the previous financial year
This allocation comprised of Sh532.5 billion and Sh253.35 billion for internal and external debt respectively.
The internal debt comprised Sh301.81 billion for interest payment and Sh223.68 billion for redemptions. On the other hand, external debt comprised of Sh131.87 billion towards payment of interest and Sh121.48 billion for redemption.