The Government borrowed a massive Sh95 billion in just four months to sink Kenya deeper into debt.
A Treasury report tabled in the National Assembly last week shows Kenya’s foreign debt has shot up sharply, just six months to the General Election, as experts warn the country’s debt is unsustainable.
In the latest report, the Government has committed taxpayers until 2053, meaning a Kenyan born today will repay some of the loans until they are 36 years old. The latest borrowing was done between October last year and January this year.
Among loans the Government has taken are Sh38 billion the Treasury says will go towards a programme aimed at increasing production and availability of water both for irrigation and domestic use.
The Government also took another Sh25 billion to finance the development of infrastructure. This was in addition to another Sh19 billion for upgrading the Kibwezi-Mutomo road.
Treasury told the House the loan for the road upgrade was meant to increase access to various markets.
The Government also signed a Sh13 billion loan to fund the Last Mile connectivity programme, whose aim is to improve access to ICT services.
Kenya’s foreign debt currently stands at about Sh3.2 trillion. The latest report makes Kenya the biggest debtor in the region.
Another report in October 2016 showed the Government had borrowed Sh226 billion in the preceding six months, which underscored the country’s insatiable appetite for foreign money.
Multinational lenders such as the International Monetary Fund (IMF) have raised concerns about Kenya’s ability to sustain its debt position.
Most of the debt burden undertaken by the current government will be borne by future governments.
The report is in line with the legal requirements that the Government must provide to Parliament a list of loans taken within specified periods.
The law requires Treasury to provide, after every four months, a report on all new loans obtained from outside Kenya or denominated in foreign currency.
“The Treasury has prepared a list of new loans signed between Government and various creditors, stating the loan balances brought forward, drawings and amortisations, names of the parties to the loan and the purpose and the perceived benefits of the loan,” said Treasury Principal Secretary Kamau Thugge in a letter to National Assembly Clerk Justin Bundi.