BY DAVID WANJALA
Kenya’s third quarter debt repayment statistics does not inspire confidence in the East Africa’s largest economy. Just as the country’s celebrated middle class are a hospital bill a way from sliding back to the realm of poverty, so is Kenya’s economy. Merely one instance of loan defaulting would roll back all the gains of yester years’ hardwork.
The country spent Sh214 billion out Sh372 billion revenue of July – September on debt repayment. That is 57% of total revenue collected in the quarter. How much did this leave for the recurrent budget, which is also beyond recommended standards. If you subtracted these two from the total of revenue in the period under question, you will come to an inevitable and painful conclusion that there was nothing left for development.
That is the undesirable summary of what Kenya’s economy is. We collect revenue, which we have also perfected the art of never reaching the targets, and spend nearly all of it on debt repayment and recurrent expenditure. For any development to take place, we must borrow again and keep the cycle.
Government is behaving like its poor population whose financial space the online money sharks have recently invaded. The way you must keep terms and conditions of Branch or Tala, or even Mshwari or KCB Mpesa, of paying in stipulated time to be extended yet another exorbitantly priced loan is exactly how your Government is operating.
We have been digging the debt hole deeper over the years. Public debt is now over Sh6 trillion, up from Sh1.89 trillion in 2013. It is not sustainable. This trend has to stop before it gets out of manageable proportions, which is where we are headed.