HEADS TOGETHER: CBK Governor Dr Patrick Njoroge and Treasury Secretary Henry Rotich
Our attention is drawn to the rising levels and cost of Kenya's public debt to the economy. The development has occasioned a serious debt crisis. Its time Kenya's public debt should be declared a national disaster to enable urgent attention and mitigation measures.
Kenya’s in excess of Sh 4 trillion public debt to GDP is estimated at 56.2% in 2017 and that over 40 per cent of the national revenue will finance debt payments in the current financial year. The debt to GDP ratio is estimated to climb over 60 cent by June, 2018.
It is even more worrying considering KRA is certain to miss the target given the prolonged electioneering period last year.
Further, Kenya has surpassed the globally accepted debt of 50 per cent of the GDP by over 6 per cent. No doubt this will lead to shrinking and drying up of major FDIs (Foreign Direct Investments) and occasion massive job losses.
It is not lost to observers that the World Bank, IMF and Moody’s Credit Rating Agency have expressed grave concern at Kenya’s incessant appetite for non-revenue borrowing.
From the foregoing, and aware of the provisions of Article 211on borrowing by the national government as read together with Article 232;
- Cofek will soon petition both The National Assembly and The Senate to demand from the National Treasury to make public the extent and detail of total public debt, its’ utilization, servicing and progress and duration of clearing such debt
- Cofek demands that Parliament freezes uptake of any new public debt
- Cofek urges that Budget and Appropriations Committee of the National Assembly sets out clear mechanisms on austerity measures, value for money, outlawing supplementary budgets as well as ensuring that Government lives within its’ means
- Cofek urges Auditor General to release the legal costs for all public agencies and require the Attorney General to strictly implement the policy on external lawyers representing Government in court cases
- Failure by Parliament, in 30 days, to implement provisions of Article 211 of the Constitution will lead to a legal intervention by ourselves
- Government must stop over-borrowing on the domestic money market as it will escalate the twin challenge of rising cost of credit