NDINDI NYORO WARNS ON DEBT

Kiharu Member of Parliament Ndindi Nyoro has sounded the alarm over Kenya's rising public debt, stating that the country risks sliding into a financial crisis if the current borrowing bender continues.
Speaking at the Christian Foundation Fellowship's (CFF) 25th Anniversary on Saturday, Nyoro claimed that Kenya has borrowed more than Ksh. 1 trillion in just the last eight months, at a rate of between Ksh. 3.5 billion and Ksh. 4 billion daily, including weekends.

"According to the Central Bank's own figures, in just eight months alone our government has borrowed one trillion shillings. That is KSh 150 million per hour. If we sit here for four hours, Kenya has borrowed KSh 600 million," he said.
The lawmaker, a former chair of the powerful Parliamentary Budget and Appropriations Committee, was worried about the country's unsustainable debt trajectory, observing that it is now utilizing up to 76% of its revenue in servicing debt.

"In August, for example, Kenya collected Ksh 157 billion in ordinary revenue, and KSh 120 billion was used in paying interest on existing loans. That is three-quarters of our revenue going to debt," Nyoro said.

"Together in July and August, we paid more debt—principal and interest—than the total revenue we earned."

Nyoro accused the government of excessive use of political appeasement in addressing economic issues, stating that Kenya's fiscal mismanagement is a result of structural governance matters rather than political disagreements.

"Economic management is the cornerstone of governance, and when you see cracks on that house, you don't call a painter to cover them up," he said. "Our mistake as a country is trying to address economic problems with political management—silencing people with appointments or favors—and feigning it's a solution."
He also questioned the utilization of recent loans, claiming much money borrowed is not funding development projects as planned.

Kenya has borrowed heavily, but the money is not going to infrastructure. Roads being built are not being funded through these new loans," said Nyoro. "There's another tier of debt which is called securitization—when you hear stadiums are being built, that is not from the trillion shillings that I am referring to. The Talanta Board borrowed that money.

The lawmaker also used the Nyota Program as an example of programs financed under external loans rather than domestic resources.

"The Nyota program is financed by the World Bank," he said. "If the World Bank finances KSh 5 billion, the government should counterpart with an additional KSh 5 billion so that more people are covered. Or, better still, provide people with KSh 100,000 each to start businesses."

Nyoro clarified that his comments were not directed at any individual but were meant to make Kenyans aware of the nation's increasing debt load.