- The only time that debt is a burden to a nation is if the nation is led by a cabal of looters, the President said.
- Countries that have advanced economically borrowed money from others to become world powers, he said.
Image: ENOS TECHE
President Uhuru Kenyatta has defended the country’s soaring borrowing since he took office in 2013.
Uhuru, whose administration has often been accused of having an insatiable appetite for loans, said countries that have advanced economically borrowed money from others to become world powers.
Debt is only a burden if the nation is led by a cabal of looters. But in the hands of a visionary administration, debt is a catalyst for rapid developmentPresident Uhuru Kenyatta
Speaking during Madaraka Day celebrations at Uhuru Gardens, the President said his administration has used "other people's money"to close the country’s infrastructure gaps and to connect local markets.
“The only time that debt is a burden to a nation is if the nation is led by a cabal of looters. But in the hands of a visionary administration, debt is a catalyst for rapid development,” he said.
The head of state urged the next administration not shy away from using "other people’s money", saying in a cleaned-up government, debt is an enabler and not a burden.
“When South Korea achieved its economic ‘miracle’ in a record 25 years, it also achieved the rank of being the fourth most indebted country in the world. But they did not call it debt, they called it ‘using other people’s money’ to advance their cause," he said.
“Similarly, in the 1900s, Britain borrowed ‘other people’s money’ to industrialise. Indeed, Britain only finished repaying this debt in 2015 after 102 years.”
The President said Kenyans should instead be asking what the next administration will do with borrowed funds. “Will they end up in private pockets or will they be used to accelerate economic advancement?” he asked.
His remarks follow a petition filed at the High Court seeking to compel the National Treasury and Attorney General Kihara Kariuki to disclose information on Kenya’s debt treaties, agreements and contracts signed with other states and lending institutions.
Debt too high - Mudavadi
Mudavadi said the public debt had risen to Sh11 trillion, surpassing the Sh9 trillion cap set by the National Assembly.
The Kenya Human Rights Commission and Institute for Social Accountability said the litigation has been prompted by National Treasury’s continued borrowing without being accountable to the public.
Political critics have also accused Uhuru’s government of suffocating the country with heavy repayment obligations.
ANC leader Musalia Mudavadi has alleged violation of debt ceiling regulations.
Mudavadi said the public debt had risen to Sh11 trillion, surpassing the Sh9 trillion cap set by the National Assembly.
Local dailies have reported National Treasury Cabinet Secretary Ukur Yatani has asked the National Assembly to amend the law to allow more borrowing.
He wants a Sh10 trillion cap to fund the budget through June 2023.
In his address, Uhuru said it took a maize trader three days to travel from Kitale to the border of South Sudan but it now takes just five hours — due to his roadworks.
Similarly, he added, traders can travel on tarmacked roads to four of five of the neigbouring countries in record time.
“And if we can transport 10 times more passengers with SGR at half the price and half the time. And move three times more cargo daily from Mombasa to our neighbours, then our borrowing has surely been worthwhile and paid tangible dividends,” the President said.
“And the national question to us today is not whether debt is good or bad.”
(Edited by V. Graham)