President Uhuru Kenyatta and AU High Representative for Infrastructure Development Raila Odinga leave today for China to attend the second Belt and Road Forum. An important occasion full of pomp and symbolism.
Even more important for Kenya, however, will be its appeal to China, our biggest debtor, for another Sh368 billion to complete the standard gauge railway, Phase 2B, from Naivasha to Kisumu.
It will open up the Lake region and China will generously agree to lend us more. When the deal is signed, that will bring the whole cost of the entire SGR to Sh840 billion. What might the collateral be?
There are questions whether the SGR is worth the cost per kilometre and why cargo transport isn't making money, why government has ordered many transporters to use it.
But the big issue is unsustainable debt. We already have two Eurobonds and are going for a third. Then Jubilee administration will have borrowed Sh730 billion in five years.
Before the third Eurobond and before the new Chinese loan, Kenya's total debt load stood at Sh5.4 trillion.
The IMF warned Parliament's Budget committee in February that debt was fast approaching unsustainable levels.
Hard as it is, we need to put on the brakes.
Quote of the Day: “The robbed that smiles steals something from the thief.”
William Shakespeare
The English poet, playwright and actor died on April 23, 1616.
