Cicero
JF-Expert Member
- Jan 20, 2016
- 2,924
- 3,074
- Each and every Kenyan needs to pay at least Sh100,000 (Tshs 2.1 million) in order to clear the country's mushrooming public debt that reached Sh4.58 trillion (Tshs 98 trillion) in November.
- Yet, the debt is expected to swell further this year, with the 2017 Budget Review and Outlook (BROP) report released in September last year indicating that Kenya's debt-to-GDP ratio is expected to rise to 59 per cent in 2018/2019, up from the current 57 per cent, due to upcoming infrastructure projects and an expected drop in revenue collection due to a myriad of microeconomics experienced in the country last year.
- The Standard Gauge Railway accounts for at least 22 per cent of Kenya's total public debt.
- In October last year, global credit rating firm Moody's placed Kenya's B1 long-term issuer rating on review for downgrade, citing a mixture of negative microeconomics, including high debt burden, government liquidity pressure, the tense political situation and uncertainties over the future direction of her fiscal policy.The agency is worried that Kenya’s debt-to-GDP ratio, which reached 56.4 per cent in June last year, will cross the 60 per cent mark by June this year, exerting more pressure on the Budget. This, Moody's said, will lower Kenya's attractiveness to creditors and investors.
- Kenya has the highest debt-to-GDP ratio when compared to her East African neighbours. The International Monitory Fund estimates Uganda's debt ratio to GDP at 36.9 per cent, while Tanzania is at 39 per cent due to its $19.1 billion public debt. Rwanda and Burundi have 37.6 and 47.2 per cent, respectively. Even so, Kenya is debt-to-GDP ranks below Cape Verde, Gambia, Mozambique, Egypt and Djibouti, who have 134, 116, 115, 97.1 and 84 per cent, respectively.
- Last year, the IMF cautioned that Kenya’s rising debt levels need to be contained, to cushion the economy from unplanned shocks. The Fund's representative to Kenya, Jan Mikkelsen, said that the country needs urgent policies to address its vulnerability to debt.
- In 2016, the World Bank raised the red flag on Kenya’s debt, especially to China, saying that the borrowing is comes at a heightened cost to the taxpayer. In its research paper titled, “Deal or no deal, strictly business for China in Kenya?” the global lender said that Kenya still has a heavy debt burden and China’s loans can bring debt to unsustainable levels.
MY TAKE:
Wakenya mtakwamisha sarafu ya pamoja ya Afrika Mashariki. Kigezo kikubwa cha kufanikisha sarafu ya pamoja ya Afrika Mashariki ni kila nchi kuwa na deni la taifa lisilozidi asilimia 50 ya pato la taifa. Nyie mnaikimbiza 60%!