What you need to know:
- The country is seeking to be self-sustaining and wean itself out of the debilitating debt trap.
- Resources are enormous and skills available to convert them into revenues.
Kenya has finally secured a Sh32.9 billion debt relief from the international lenders operating under the Paris Club. But this is just momentarily, for six months, and the objective is to allow the country to reorganise its finances so as to meet its budgetary obligations.
The development comes against the backdrop of economic depression precipitated by Covid-19 that has crushed productive ventures, cut tax revenues and compelled the government to inject huge sums of money into social programmes to mitigate the impact of the pandemic.
Consequently, National Treasury Cabinet Secretary Ukur Yatani has directed that the savings accrued from the reprieve should be deployed to fighting Covid-19 and alleviate its socio-cultural and economic shocks, especially among poor households. The thinking is super but it has to be actualised. Let the cash be utilised to tackle the pandemic.
However, as we have argued here before, loan waivers or rescheduling of repayments is not something to be delighted with, for it depicts inability to manage own funds or borrowed cash. At a deeper level, it undermines a country’s credibility and renders it susceptible to external influences.
The country is seeking to be self-sustaining and wean itself out of the debilitating debt trap. And it has potential to achieve that.
Resources are enormous and skills available to convert them into revenues. But that is where we fail. At this point in the country’s history, it should be self-sufficient, meet its recurrent expenditures and the people live without debt.
Mr Yatani has to enforce tight financial controls and manage expenditure prudently. Annual reports by the Auditor-General and other independent analysts have consistently deplored the entrenched practice of mismanagement of public resources.
Billions of shillings are lost every year through grand corruption, pilferage and wastefulness by rogue officials and their accomplices. But the culprits are never seized; nobody is ever punished or otherwise made to pay for the crime.
A negative narrative is entrenched that stealing or misusing public resources is not punishable. That must stop.