Don’t be afraid to go into debt, Uhuru demands the next administration

NAIROBI, Kenya, June 1 (Reuters) – President Uhuru Kenyatta has urged the next government to use debt while emphasizing its importance as a key accelerator of economic development.

Kenyatta, during his final national event speech during the Madaraka Day celebration, defended the anniversary administration’s decision to borrow more, noting that it has helped “close our infrastructure gap and connect our markets”.

“Our borrowing has certainly paid off and paid tangible dividends,” Kenyatta defended the SGR project, which transports three times more cargo daily from Mombasa to neighboring countries and carries ten times more passengers with SGR at half price and half the time.

To keep the same pace, Kenyatta said, “The Fifth Government should not be afraid to use ‘other people.’
Money. In a clean government, debt is a enabler, not a liability.”

“On the My Administration side, we’ve used ‘other people’s money’ to bridge our infrastructure gap and connect our markets. If it took a corn trader 3 days to travel from Kitale to the South Sudan border, what we borrowed means it now takes them just 5 hours,” he explained.

His comments come as the National Treasury has proposed raising the debt ceiling from the current Sh9 trillion to Sh10 trillion to allow the government to borrow more to meet the Sh3.33 trillion budget for fiscal year 2022/23 finance.

From December 2021, Kenya’s stock of public and state-guaranteed debt was Ksh8.02 trillion (US$70.97 billion).

A large part has gone into infrastructure projects, most notably the standard gauge railway, the contracts, agreements and studies related to the construction and operation of the SGR are not yet publicly available.

The 578.8 km Mombasa to Naivasha SGR project was built at a cost of Ksh 477 billion and is the largest single project ever undertaken in the country.

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