In the past few years, the ballooning national debt has taken many Kenyans aback.
In the past few years, the ballooning national debt has taken many Kenyans aback. As a result, they have been throwing salvos at the National Treasury and the Jubilee administration over the ever-increasing debt.
But it is time they directed their anger to those who have actually betrayed them — Members of Parliament.
The people Kenyans elected to represent them in the National Assembly; to come up with laws that can improve their standards of living, are the sames ones that have saddled them with a huge debt.
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The national government has overshot the debt ceiling three times after being given room to borrow by the MPs.
On Wednesday, the lawmakers acceded to Treasury’s request to change the law so that the debt ceiling can be an absolute figure — Sh9 trillion as opposed to the previous case in which it was a percentage of the national output (GDP). The change of law, Treasury argued, would encourage transparency.
This is fair enough, but not the real reason for the changes. The main reason is that Treasury might have breached the 50 per cent debt limit set by the Public Finance Management Act.
The last time Treasury released the numbers, debt-to-GDP in present value terms stood at 49 per cent. In nominal terms, debt as a fraction of GDP stands at 61 per cent, inching closer to the 70 per cent threshold.
MPs, the gatekeepers, have watched as the country’s debt has grown from Sh1.9 trillion six years ago, when President Kenyatta came to power, to a staggering Sh5.8 trillion. They will still be happy to push the ceiling further up once Treasury hits the new set target.
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Treasury insists that it will take them long, almost 10 years, before they reach this limit, but given their previous records, analysts expect them to hit this ceiling within five years.
No country, or even person, can grow without debts. However, people should take debts for ventures that will help them grow. Moreover, the debt should be sustainable.
However, for Kenya, this has largely not been the case. Some of the projects that the loans have been pumped into are now white elephants.
Others have refused to pick up, even as taxpayers begin to repay the debts. In other words, there has been no value for money.
Moreover, most of the loans that the country has incurred have been expensive and consequently have been depleting the country’s tax revenues.
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If fact, there have been reports that the Government has been borrowing money to pay other loans.
In light of this, it would have been prudent for the legislators to stop Treasury from inflating our already heavy debt burden. MPs have terribly let Kenyans down once again.