During July and August, the first two months of the current financial year, the government borrowed Sh374 billion to plug a budget hole occasioned by Covid-19 pandemic. The new loans pushed the country’s total debt to more than Sh7 trillion, slowing sending the debt level to near unsustainable levels.
Kenya’s debt has officially clocked Sh7 trillion after the National Treasury borrowed some Sh374 billion to plug a budget hole occasioned by Covid-19 pandemic. Economic disruptions occasioned by stringent containment measures forced Treasury to go on a borrowing spree. Tax revenues have been unimpressive, yet more than any other time the government is expected to stimulate the economy.
With dwindling tax revenues, borrowing remains the only option, as undesirable as it is. Unfortunately, increased borrowing also comes at a time when there have been reports that Covid-19 funds, most of which have been borrowed, have been misappropriated.
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We hope relevant agencies will get to the bottom of these allegations and anyone found to have stolen public funds brought to book. It is also important that the borrowed billions go to projects that will help the country address the health and economic effects of the pandemic. This money should not line the pockets of tenderpreneurs, some of whom have already been fingered in the ongoing probe at KEMSA.
It is also critical that the National Treasury reverts to belt-tightening measures to avoid plunging the country into a financial crisis. Besides doubling its tax collection efforts, the government should also reduce non-essential spending and wastage.