Even as Kenya’s appetite for loans keep on growing to alarming rates, it has emerged that the government has used assets of eight key State corporations as collateral to secure loans amounting to Sh147 billion.
This was revealed in a document presented in the National Assembly by the Parliamentary Budget Office on Thursday.
This means that the corporations risk seizure by lenders should Kenya fail to service the loans as agreed.
The Standard reports that the eight State companies include Kenya Airways (KQ), Kenya Airports Authority (KAA), Kenya Railways, Kenya Electricity Generating Company (KenGen) and Kenya Power.
Others are East African Portland Cement, Tana and Athi Rivers Development Authority, and Kenya Broadcasting Corporation (KBC).
Kenya Power was used to guarantee a loan of Sh14 billion, Kengen (Sh10 billion), Kenya Airways (Sh76 billion), KBC (Sh6 billion) and Kenya Railways (Sh4 billion.)
This comes as President Kenyatta traveled to China this week to secure a Sh368 billion loan for the extension of the Standard Gauge Railway (SGR) from Naivasha to Kisumu.
MPs led by Emgwen’s Alex Kosgey have proposed amendments to the law to regulate government borrowing.
The MPs have raised concerns over the country’s huge public debt, which currently stands at 5.6 trillion.
“We cannot allow this situation whereby the Treasury or the Presidency or anyone can just decide today that they want to borrow this much yet we have already overburdened the common mwananchi,” says Sigowet-Soin MP Kipsengeret Koros.
Mathira MP Rigathi Gachagua says: “Let us be careful that we don’t sign an agreement that will make us slaves to foreigners; that will enslave us for 30-40 years.”