Kenya Is Broke, Now Surviving On Debts Within And Without

Are you broke? Are worried about tomorrow because you do not have money in your pockets? Well, relax. The government itself is broke and surviving on borrowing. Who are you to complain about being broke when a whole government is?

The situation is so dire that the government is currently borrowing cash to pay other debts. It is like digging a new hole to fill an old one with the hope that the new one will fill itself. Earlier this month, the government had applied to have some debts written off.

On Monday, it emerged that the government was in the process of borrowing 400 billion shillings from both the World Bank and the International Monetary Fund (IMF) to support the “economic recovery” in the middle of the Covid-19 pandemic.

Interior CS Fred Matiang’i, in an interview, hinted that the government was considering cutting pay for civil servants in extreme measures to save money because the country is in a “financial distress.” “All of us are going to be called upon to accept these extraordinary measures,” he said.

For the first three months of the 2020/2021 financial year, the government, through the Kenya Revenue Authority (KRA) collected only 378.7 billion shillings in revenues against the target of 428.9 billion shillings attributing the fall to a drop in PAYE and VAT.

The Treasury also says it used 357.1 billion shillings on a recurrent budget between the month of July and September 2020 against a target of 397.6 billion shillings. A lot of revenue is going into funding things that have no returns like paying salaries.

County governments have announced that they are running on the empty. The last time they received cash was in September and they are now not able to pay salaries even to health workers. “We will soon not be able to deliver any service,” says Governor Wycliffe Oparanya.

Talking of health workers, doctors have announced a nationwide strike in two weeks. The country is headed the wrong direction but BBI must go on.