President Uhuru Kenyatta has defended the Ksh 8.2 trillion public debt stock his administration has accrued since assuming office nine years ago terming it a necessary option for rapid development.
While presiding over his last Madaraka Day national celebrations at Uhuru Gardens in Nairobi, President Kenyatta said the borrowed funds have been key in closing infrastructure gaps and connected markets across the country which has facilitated local and regional trade.
“The only time debt is a burden to a nation, is if a nation is lead by looters. But in the hands of a visionary administration, debt is a catalyst for rapid development,” the President cautioned as he gave backing to borrowing by the next administration.
He went on, “As we prepare to hand over the baton to the Fifth Administration, there are three critical areas that the next administration must focus on. Firstly, you cannot do the Big Push Investments in dams, roads and rail in an environment of corruption. I say so because the devil of corruption is still alive and well.
Latest data from the Central Bank of Kenya (CBK) indicate that upon his exit in August, President Uhuru Kenyatta will leave Kenya with total public debt amounting to Ksh. 8.4 trillion compared to Ksh. 1.4 trillion registered when he took over from the late President Mwai Kibaki in 2013.
Of the total public debt currently held by the government, Ksh. 4.2 trillion constitutes domestic debt while another Ksh. 4.2 trillion being external debt.
Majority of the debt the has been used to finance infrastructure projects across the country with the 578.8km SGR project from Mombasa to Naivasha built at a cost of Ksh 477 billion being the single largest project ever taken in the country.
Since 2013, the government has been able to construct 10, 500km of road network across the country key among them Nairobi Expressway which has been built under the Public Private Partnership.
Others built by exchequer funds are Kenol-Muranga road, Western Bypass, Dongo Kundu Bypass, Mombasa –Kwa Jomvu dual carriage, Nairobi-Moyale highway, Kisumu-Kakamega highway and Kisumu-Kisii-Isibania highway.
“Today, any trader can travel on a tarmac road, to four out of five of our neighbouring countries and do so in a record time. If we can transport ten times more passengers with Standard Gauge Railway at half the price and at 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,” added President Kenyatta.
President further added that the investments placed on modernizing Kenya’s public infrastructure has facilitated trade catapulting Kenya to become Africa’s 6th largest economy from 12th when he assumed office.
“In the same time we have tripled the wealth of our nation, from a Gross Domestic Product (GDP) of Ksh 4.5 trillion to close to Ksh 13 trillion today. As a mark of this remarkable growth, our tax revenues have doubled from Ksh 800b in 2012 to Ksh 1.6 trillion as at April 2022,” He stated.
This comes as the National Treasury embarks on seeking National Assembly’s approval to increase the statutory debt ceiling from the current Ksh 9 trillion to Ksh 10 trillion thereby giving the next administration a headroom to accumulate additional debt.
