• IMF says America's debt is higher, hence we should not worry; but that is an A+ economy.
•A Sh360 billion debt is an added burden to taxpayers.
Opposition boss Raila Odinga has accompanied President Uhuru Kenyatta to China to seek funds for the extension of the standard gauge railway from Naivasha to Kisumu.
The ODM leader on April 20 said the Beijing visit will pave way for a Sh368 billion loan. Raila alleges that the loan will help revive the Kisumu Inland Port whose fortunes have dwindled due to the collapse of the dilapidated railway.
That means more public debt on taxpayers’ backs. Raila and Uhuru maintain that borrowing is sustainable and it is the only way to spur development projects. ANC leader Musalia Mudavadi, as an economist, has argued that the economy is sliding fast towards total collapse because of borrowing to pay for recurrent expenditure and looting.
Mudavadi, among other experts, has projected that Kenya’s debt may shoot up to Sh7 trillion by the time Uhuru leaves power in2022.
Yet IMF that has joined the fray argues that even at about 52 per cent to GDP, our public debt should not cause any concern because the US’s debt ratio is 105 per cent of GDP. This line of thought is illogical because we are a B+ economy comparing ourselves with an A+ economy. We have no idea how to handle social welfare issues, hence the reason we even steal medical supplies.
Kenya’s current trend of public debt accumulation is unsustainable and will surely hurt Kenyans more. Raila was largely seen as the last hope of a section of Kenyans before last year’s handshake. While the truce has brought about the much needed political stability in the country, this is despite the fact that details of the pact remain scanty to date.
Raila’s announcement on the potential loan has turned him Uhuru’s “aide” in debts.
Analyst with Gravio Africa