Is Treasury still on the right path?
SEE ALSO :Treasury should live within its meansIn attempting to jump-start the economy, the State failed to recognise that the South Asian countries prospered under strong-men who dictated economic policy. This was as true for the countries that came to be known as Asian Tigers. China cannot understand why the government is unable to compel all importers and exporters to use the SGR line instead of trucks. Treasury’s hope that it will find countries and development partners to buy off the expensive loans - particularly from China and the financiers of Eurobonds whose interest rates are routinely above seven per cent could well prove to be a pipe-dream. This is because many of the bilateral and multilateral lenders had warned Kenya against turning to China to fund projects that, at best, offered marginal returns. Whatever the outcome, the silver lining in Treasury’s plans is that the acting Cabinet Secretary Ukur Yatani appears to have understood how his predecessors’ actions led the country to the precipice. Interestingly, Kenya is not alone. Her peers have fallen into the same Chinese debt trap. The result is that many of these countries have amassed huge debts - threatening their economic survival. Ironically, some of them had benefited from debt write-offs only a few years ago. Many could, however, not resist the allure of Chinese loans.
Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.