Domestic Borrowing in Kenya: A shocking report has emerged showing how President Uhuru Kenyatta’s Jubilee government took an average of Sh. 2.1 billion daily in January and February.
This report was published in the Daily Nation on Tuesday. The report says that these average daily borrowing by the National Treasury made the total of Sh. 1.26.4 billion loans that the Jubilee government took in the period.
This amount added to Kenya’s ballooning debts which stood at Sh. 5.4 trillion following this latest borrowing spree.
“Latest debt data published by the Central Bank of Kenya (CBK) shows that domestic debt rose by Sh. 142.6 billion to Sh. 2.692 trillion in the period, while external debt contracted by Sh. 22 billion to Sh. 2.707 trillion. The government has upped its borrowing through Treasury bonds and bills this year, taking advantage of high demand from investors. The accelerated borrowing from the domestic market—mainly banks— is however bad news for the private sector, which has been struggling to secure loans from the lenders,” the report that was published by the Daily Nation said.
The report also revealed that by the end of February, the government had borrowed up to 66 per cent of the domestic target.
ironically, despite the heavy borrowing by the Jubilee government, the trillions Kenya owes are yet to be felt positively in the economy. Nonetheless, it has seen the debt to GDP ratio rise over 50 per cent, with reports that the government was planning to review how the local GDP to debt threshold is calculated in order to pave way for more borrowing. In late December, President Uhuru Kenyatta vowed that he would continue to borrow, arguing that Jubilee’s heavy borrowing was not a threat to the country’s economic stability.