Raise funds innovatively to reduce Kenya’s external debt

Reports that Kenya’s public debt might be teetering towards unsustainable levels is disquieting. This revelation from a subsidiary of the United Nations should worry every Kenyan who cares about the country’s future.

This week, a report by the United Nations Conference for Trade and Development (UNCTAD) warned that if Kenya does not find alternative ways to finance its expansive budget, then we are staring at an unusually bleak future.
Kenya’s total public debt has jumped to more than Sh3 trillion after the government went on a borrowing spree to finance mega infrastructural projects, including roads, rail and ports.

There is no doubt that most of these capital-intensive infrastructural projects such as the Standard Gauge Railway (SGR) will positively transform Kenya’s economic landscape in the long-run. But the huge debt stock will certainly have a toll in the near future as Kenyans dig deeper into their pockets to repay the debts.

There is nothing wrong with borrowing— even the richest economies in the world resort to debts to beat the odds. However, borrowing has to be prudent. Let’s borrow when we really need to, otherwise, as the report puts it, the Government needs to find innovative ways of plugging its budget deficit.

For example, Kenyans in the Diaspora send in billions of shillings. The Government can make good use of these remittances. Moreover, the Government need not play the hero by wanting its name stamped on all development projects. Partnering with the private sector is an invaluable way in which the State can save the future generations from the burden of huge debts.