Each Kenyan owes the world Sh79,000, thanks to Jubilee's borrowing

Each Kenyan owes the world Sh79,000, thanks to Jubilee's borrowing spree that has heaped an additional Sh17,000 debt in a year.

President Uhuru Kenyatta's administration borrowed Sh680 billion between December 2014 and December 2015, according to a new report by the Controller of Budget.

The amount borrowed in one year is slightly more than half of all the country's revenue for the current financial year.

The report warns that if the country does not raise enough revenue, there is a risk development goals would be missed because the bulk of the money will go into debt repayment, leaving nothing for infrastructure, schools and hospitals.

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In the half-year report for the current financial year, Controller of Budget Agnes Odhiambo said Sh230 billion was borrowed from the local market while another Sh450 billion was borrowed from the foreign market.

The extra debt burden was incurred in 12 months in 2015 as the Government grappled with public questions about the use of borrowed money, especially the $2 billion (Sh200 billion) Eurobond.

The report says the Sh680 billion borrowing pushed public debt to Sh3.16 trillion in December 2015, up from Sh2.48 trillion in December 2014.

A fortnight after President Kenyatta's State of the Nation address, which said the economy was growing, the Controller of Budget cited the taxman complaining about a "decline in economic activities" in the country as being responsible for the low revenues, and the consequent pressure on Government resources to pay off debt.

The report also indicts the Government's policy to freeze employment and any wage increases as one of the reasons for low tax revenues.

With the growing debt, the Controller of Budget has now warned that the country has to be careful, or else paying back the money at a time when the taxman is missing revenue targets will be a very huge challenge for Kenya.

According to the report, not only did the low revenues delay the release of money to ministries and other State agencies, but it also meant debt repayment took a huge chunk of the money.

More than half of the revenue collected in the half-year, the report said, went towards paying back debt because the law requires that the National Treasury first pays back the debt before spending money locally.

"Some departments did not receive any funding for development in the first half of the FY2015-16, which may affect the country's development goals," said the report.

The Controller of Budget also appealed to the National Treasury to find more ways of raising more money.

"The National Treasury should also introduce austerity measures to reduce unnecessary public expenditure and encourage expenditure on development activities," the report added.

The Controller of Budget explains that the Kenya Revenue Authority (KRA) had fallen short of its revenue targets by Sh60 billion.

In simple terms, the Government freeze on pay rise and employment is also affecting how much KRA collects. Mass sackings in the private sector are also part of the reason KRA is having a problem with tax collection.

The Controller of Budget also blamed the low revenue on "weak performance in some sectors due to restructuring and decline in contribution by a large number of private firms due to deteriorating economic environment".

By end of December, the Government had collected Sh538 billion, which is 86.5 per cent of the half-year target.

But even with revenue shortfalls, the Government could still afford to splash millions on travel and hospitality.