By Faith Mudoga
CS Treasury Ukur Yuttani
Kenya’s public debt has been a subject of intense debate
with Kenyans expressing concerns about the handling of debt repayment. This
was revealed by the Auditor General’s report on the country’s public debt.
Currently,
the country’s public debt now stands at Ksh 8.4 trillion. This comes about even
when the government has recurrently maintained that the country’s debt is
sustainable and that there’s no cause for alarm.
The National Treasury maintained that even at the present
8.4 trillion shillings and 69 % of the country’s Gross Domestic Product.
Recently the CS Treasury Ukur Yuttani gave assurance
to Kenyans that the public debt is manageable. “Our debt is highly sustainable,
the proportion of the commercial border, the bilateral and the multilateral
will need a conventional standard,” He said,
The state strongly holds its vocalized confidence
notwithstanding a new report by the office of the Auditor-General revealing
some facts about the defaulted loans.
According to the report, the government has defaulted on
debt repayment of up to 5.1 billion shillings for the financial year that ended
30th June 2021.
The loans that were defaulted had been secured from an
international commercial bank. The purpose of the loan was that it was to be
used for the construction of the Arror, Itare and Kimwarer dams.
According to the statistics from the Auditor
General Nancy Gathungu, “The government has defaulted on paying Sh790.6 million
for Arror, Sh3.1 billion for Itare and Sh1.3 billion for Kimwarer dams.”
“In the case of Itare and Kimwarer dams the
government of Kenya defaulted in paying both principle and interest whereas in
the case of Arror it defaulted only in the payment of the interest accrued,”
she added.
Gathungu’s report further raises the red flag on the
taxpayer who bears the burden of assuming commitment fees for loans which the
national treasury is yet to disburse.
The public debt audit report reveals that in the
financial year ended 30th June 2021 the taxpayer paid Sh2 billion as commitment
fees for loans that were not drawn down and therefore did not benefit the
economy.
These revelations from the Auditor General’s office come
at a time when the national treasury has proposed through the Finance Bill of
2022 to revise Kenya’s debt ceiling from the present Ksh 9 trillion to 55 per
cent of the country’s GDP.
The proposal is currently being considered by the
national assembly’s Finance and Planning Committee.
