Public debt to hurt Kenyans more

The debate and acrimony over Kenya’s public debt, its rapid growth, and whether it is sustainable is serious and therefore, any comparisons drawn to justify opposing arguments should be rational.

Some have argued that the economy is sliding fast toward total collapse because of borrowing to pay for recurrent expenditure and looting.

Yet, some, including IMF that has joined the fray, argue that even at about 52 per cent to GDP, our public debt should not cause any concern because the US’s debt ratio is 102 per cent of GDP. This line of thought is totally illogical for, as an economy, we are not comparable at all with the US.

How can we compare a B+ economy with AA+ economy? Going by 2012 figures, our total revenue was $7.3 billion while US’s was $3 trillion. In other words, our economy is 0.24 per cent of the US economy! With regard to GDP per capita, US stands at $53,041.98 while Kenya stands at $1,245.51 which means that an American citizen is 42.58 times better off than the Kenyan counterpart.

USA’s budget deficit is 2.8 per cent and Kenya’s is negative 4.6 per cent but, we are a net importer economy and this statistic refers to year 2012 when our public debt declined before picking in 2013 up to now.

Then on matters of wealth inequality, the US’s Gini index stands at 0.38 while Kenya’s stands at 0.425 which really means that over 42 per cent of Kenyans live below poverty line.

About 24.3 per cent of the US’s GDP accounts for social security expenses to support the under-privileged. In Kenya, we have no idea how to handle social welfare issues hence, the reason we even steal medical supplies. Kenya’s current trend of public debt accumulation is unsustainable and will surely hurt Kenyans more.