By Gitungo Wamere
Last week’s news was awash of a ballooning public debt and risk of our economy being burdened, if Kenya continued with her bad habit of over borrowing. In the last five years since the rise of President Uhuru Kenyatta, Kenya has had unprecedented level of debt. The debt increase has been caused by the widening budget deficit.
To all concerned citizens, this debt elicits questions. Is our government too ambitious or wasteful? To be prudent is to bite what you can chew, but, is the government putting a heavy burden on Kenyans shoulders? So far, critics of Jubilee government are seated pretty waiting for the public debt to suffocate Kenya’s economy since the government is not taking advice or warnings.
In the history of states, there is no single state that has never relied on debt. Even the strongest of world economies borrow, but, there is a difference between our borrowing and that of other states. We borrow too much money but never see or feel the impact of the loans. Kenyans from far and wide are asking how these loans are spent. Do we borrow to ‘eat’ or invest? Do we have a return on investment so far?
Our Public Finance Management systems ought to be made tighter. Do we have a public debt management office? It is this office that should be informing Kenyans how much money is borrowed and how it has been invested.
Do you remember the long and sometimes incoherent stories about the Eurobond? Money was borrowed and none can point the projects that were financed by the Eurobond loan. It is a question that shall be asked many years to come. Was the money used on infrastructure or recurrent expenditure? If it was used on recurrent expenditure was that a wise thing for the government to do?
There is a predictable obsession with the Eurobond loans by African governments which fear accountability. One salient thing is that, this type of loan doesn’t come with conditions and therefore governments can use the funds acquired in any way that they deem fit. Could Kenya be sharing the same story? Is that the reason as to why the 2014 Eurobond cannot be ‘accounted’ for, shilling by shilling?
To save Kenya from the huge public debt, the country needs to embrace strategies to enable government to make money locally and carry out a number of austerity measures.
To date Kenya has an imbalanced trade with other countries, we import more than we export. For instance in 2017 we imported goods worth 17.1 billion dollars and only exported goods worth 5.72 billion dollars. This whopping deficit is worrying. We buy a lot and sell too little.
How does the government ensure that in years to come we become an economy that sells more to other countries more than we buy from them? President Kenyatta has said that he wants to revamp our manufacturing sector. This is a good idea and we can only hope that his government moves with speed to implement it.
It is still not understandable why in this age and time Kenya exports raw materials only to buy a finished product later, expensively. In activating our manufacturing sector, President Kenyatta should start by making sure that we export less and less of our raw materials. If it is coffee, let’s process it here and sell the finished product to the foreign market.
Another problem with our budget is that it has too many leakages. More often than not public funds are outrightly wasted or looted without shame. It is tormenting to learn that a third of Kenya’s budget is lost through corruption. Isn’t it insane to steal from a budget that has to be supplemented from borrowing? Isn’t this a crime in the same class with genocide?
Finally, to meet its financial obligations without burdening the country with debt, the government should resolve to be frugal and strict on public funds management. To do this, strengthening the office of the auditor general and that of the comptroller of budget comes in handy. The executive should not have a strained relationship with these two offices but work together to make sure that all the leakages in the usage of public finance are sealed.