Kenya’s debt burden has soared to Shs Sh3 trillion – and it is growing rapidly as fears of more taxation for Kenyans increase.
In a period of six months this year, the Jubilee government borrowed Sh226 billion making Kenya’s total foreign debt the highest in the region
The National Assembly was told during the six-month period, the country signed 18 loan agreements to finance various projects, including:
- Sh60 billion from the Chinese ‘to ease the cost of doing business’ in the country, and
- Sh20 billion syndicated facility to help revive the troubled national carrier, Kenya Airways (KQ).
Unsustainable Debt Burden
The UN warned that Kenya is among African countries whose debt burden is unsustainable. In a report titled Economic Development in Africa Report 2016, the UN Conference on Trade and Development (Unctad) advised the country to reduce its reliance on external funding as ‘the external debt continually looks unsustainable.”
In May, the International Monetary Fund (IMF) also raised the red flag over the country’s growing Chinese loans, which notably, form a huge chuck of the report tabled in the National Assembly.
The Government proposes to spend Sh466 billion on public debt repayments in the financial year starting next month, effectively committing a fifth of the budget to repay loans.
According to the World Bank increasing debts from China will impact heavily on Kenyan tax payer. Tax collection, fell Sh69 billion below target for the nine months to March 2016.