President Uhuru Kenyatta, in a recent televised interview, told a panel of broadcast journalists that all the money his Government borrowed had been put into good use.
Because of this, he said, he would continue borrowing - as long as the money gets into development activities such as roads, railways, ports and energy projects, “ I will borrow again and again,” he said
But, has all the money been put into development activities? And if it has been invested in infrastructural projects, has it been value for money?
The President was right that media analysis on the country’s ballooning debt have concentrated on the absolute value of the public and publicly-guaranteed debt, as opposed to looking at it as a fraction of the size of the economy captured using gross domestic product (GDP) - or the sum of all finished goods and services in the economy.
Questions have been raised as to whether all the borrowed cash has actually gone into development. To date, the Auditor General Edward Ouko is yet to give the Sh275 billion ($2.75 billion) raised from the country’s debut sovereign bond, a clean bill of health.
“I wish to draw your attention to Note 5.7 in the statement of receipts into and issues from the National Exchequer Account for the year ended June 30, 2016, which reflect an Exchequer balance of Sh203,491,419 brought forward from 2014/2015 financial year,” wrote Ouko in the audit report for 2014/2015. “As indicated in the Auditor’s Report for 2014/2015, the receipt of net proceeds from commercial financing (Sovereign/Euro Bond) of Sh215,469,626,036 accounted for in 2014/2015 financial year could not be ascertained as investigations into the receipts, issues, accounting and utilisation of the funds related to the Sovereign/Euro Bond was still on-going as at 30 June 2016.” Of course, Ouko has also queried both national and county governments’ budgetary expenditure, consistently putting well-spent money at less than a third of the total.
This means that even money meant for development expenditure, mostly borrowed cash, is also not accounted for. However, Financial Standard, could not get hold of reliable empirical evidence showing that borrowed cash had been misused, especially given that a good chunk of the money is programme-based.
However, there are doubts if much of the country’s borrowed cash, which has since hit Sh5.1 trillion, has been put into good use.
Indeed, despite Government insisting that it has been putting money into projects that will result into increased production of goods and services or bigger GDP -such as building road built resulting into more produce being moved to the market rather than rotting in shamba- debt has been growing faster than GDP.