Time to slow down on in­fra­struc­ture spend

The Star (Kenya) - - Voices -

The Quar­terly Eco­nomic Bud­getary Re­view shows the out­stand­ing amount of Kenya’s pub­lic debt has risen al­most two-fold since the Keny­atta Ad­min­is­tra­tion en­tered of­fice, from Sh1.8 tril­lion in 2013 to Sh3.5 tril­lion as of Septem­ber 2016.

This is a steep rise in­deed and is putting in­cred­i­ble pres­sures on the econ­omy.

The pub­lic debt has in­creased from the Sh1,382,382,194,875 re­ported in the year 2010/2011 to the Sh2,674,806,364,195 in the year 2014/2015, an in­crease of Sh1,292,424,169,320, or 93 per cent over the five- year pe­riod.

Ju­bilee has clearly been on a bor­row­ing spree and while it is good to in­vest in large in­fra­struc­ture projects, Kenya should try a more step-by-step ap­proach.

Fully 20 per cent of KRA rev­enue col­lec­tions are go­ing to be ded­i­cated to ser­vic­ing debt, in­clud­ing the con­tro­ver­sial Eurobond. The gov­ern­ment had pro­posed a sec­ond bond this year. Trea­sury tar­gets a net do­mes­tic debt of Sh406.61 bil­lion by June 2017.

When the pub­lic debt grows so ex­po­nen­tially, it is surely time to slow down on the in­fras­truc­tural spend and bor­row­ing.

HIS­TOR­I­CAL QUOTE “Learn­ing with­out think­ing is use­less, but think­ing with­out learn­ing is very dan­ger­ous!”

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