Kenya’s mounting debt crisis traces back to the final year of former President Uhuru Kenyatta’s tenure, when his administration ramped up borrowing in a bid to leave a substantial legacy. The implications of this borrowing spree have become clearer, revealing a troubling narrative of funds funnelled into projects that have since faltered.....CLICK HERE TO READ THE FULL ARTICLE>>>
In a striking revelation, Kimani Kuria, Chairman of the Finance and National Planning Committee, has shed light on the scale and purpose of the debt accumulated during Kenyatta’s last year in office.
The country’s total debt of Ksh10.39 trillion includes a significant portion borrowed under Kenyatta, ostensibly for ambitious projects that have now turned into ghost ventures.
“Most of the money that was borrowed at the tail end of the previous administration, were done when there was pressure to launch projects,” stated Kimani in an interview with Inooro TV on Tuesday.
Data from 2022 paints a grim picture of fiscal management. In the months leading up to the General Election, Kenyatta’s administration borrowed at an alarming rate. Between May and August 2022, the Treasury secured six loans worth Ksh105 billion.
This equates to a staggering daily borrowing of Ksh854 million. The funds were drawn from a mix of bilateral, multilateral, and commercial lenders, pointing to the extensive reliance on external credit.
Former Treasury Cabinet Secretary Ukur Yatani confirmed the scale of this borrowing spree in a report tabled in Parliament. By August 31, 2022, the Treasury had inked loan agreements totalling Ksh105 billion, with one loan partially disbursed. The urgency of these financial manoeuvres was driven by a desire to launch high-profile projects before Kenyatta’s departure.
The pressure to deliver visible results before the end of his term led to what Kimani Kuria describes as a mismanagement of resources.
Speaking on Inooro TV, Kuria highlighted the Standard Gauge Railway which cost the country Ksh477 billion project funded by Chinese loans that remains largely unused. Kuria pointed to Phase 2A from Nairobi to Naivasha which was completed in 2019 at Ksh150 billion but has remained largely unused.
“Most of the money borrowed was used under pressure to launch projects that are now of questionable value,” Kuria stated.
Kenyatta defended his administration’s borrowing during the Madaraka Day celebrations in June 2022. He argued that the debt was necessary to address infrastructure gaps and spur economic growth.
“We used ‘other people’s money’ to bridge our infrastructure deficits,” Kenyatta asserted. He highlighted improvements like reduced travel times for maize traders and increased efficiency of the Standard Gauge Railway (SGR) as evidence of the positive impact of the debt-fuelled projects.
However, the legacy of these investments is now under scrutiny. Public debt surged from Ksh1.89 trillion inherited from President Mwai Kibaki to an estimated Ksh8.59 trillion by the end of Kenyatta’s term. Critics argue that this massive borrowing did not translate into sustainable or impactful projects, with many initiatives failing to meet their intended goals.
The situation has prompted calls for a broader review of Kenya’s financial and constitutional frameworks. Kuria has suggested revisiting the 2010 Constitution to evaluate the necessity of maintaining all 47 counties and certain constitutional bodies. He emphasised the need for a strategic realignment of priorities to address the country’s financial predicament.
“We are in a hole… We need to get our priorities right,” Kuria asserted. “Most of these loans did not prioritise projects that were relevant…CONTINUE READING>>
