CS Rotich Put to the Sword to Give Well-Thought Plan to Help Get out of Huge Public Debt

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Just how will Kenya be able to settle the rising number of debts it owes a number of foreign governments?

This is the question Kenyan MPs aimed to answer when they converged in Mombasa for the second National Assembly Leadership Retreat.

The Members of Parliament want National Treasury Cabinet secretary Henry Rotich to give Kenyans what they termed as a well-thought plan to get out of the public debt that currently stands at Sh 5.3 trillion.

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According to statistics, Pending bills for both National and County governments is estimated at Sh400 billion, with Small Medium Entrepreneurs (SMEs) accounting for the majority of the bills said to be outstanding.

Additionally, the legislators called on the government to evaluate the kind of investments that should be funded by public debt.

Addressing the forum yesterday, chairperson of the National Assembly Committee on Budget and Appropriations Kimani Ichung’wa took issue with Treasury’s laxity in adhering to the Debt Management Strategy Paper which has been largely blamed on increased debt.

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Ichung’wa cautioned the government against further borrowing saying the public debt is not sustainable.

He blamed the National Treasury for unrealistic revenue projections which have not only left huge budget deficits, but have also seen government increased appetite for external borrowing to bridge the deficit.

“We have never been realistic in our revenue projections. If we do not meet the targets for the previous Financial Year, how do we meet the projections for the next one which is even higher?” he posed

The Kikuyu MP was reacting to a presentation by Kenya Institute of Public Policy and Research (Kippra) head of strategy and policy Benson Kiriga, and National Treasury’s director of debt policy, strategy and risk management, Daniel Ndolo, who had argued that Kenya’s debt levels are still within sustainable levels.

Ndolo defended the Sh5.6 trillion debt saying the country has a huge deficit in critical projects to spur economic growth.

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He said for the last seven years, funds have gone into funding multi-billion-shilling infrastructural projects.

“Our public debt is within sustainable level. What we need to ask ourselves is, where are the areas the monies has it been utilised?” he asked.

The National Assembly, however, recommended that interventions be put in place to control the public debt.

This is in addition to reviewing the interest rate capping to address the issue of borrowing of funds by SMEs which are currently facing difficulties with financing from banks.

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