Kenya’s debt problem creates bleak future

Though debt is not necessarily a bad thing, how it is used and its cost determines how risky it is. ILLUSTRATION | NATION MEDIA GROUP

What you need to know:

  • President Kenyatta’s predecessor was more conservative in his approach to debt having taken charge of the country when its public debt was at Sh629 billion.
  • Devolution has also created a new cost centre, which has seen the government set aside more than Sh300 billion every year to fund the devolved units.
  • Treasury recognises however that public expenditure pressures and poor revenue collections are some of the immediate risks it must deal with.

For every Sh100 Kenya is collecting in tax revenue, it is spending Sh130 to fund its budget needs, an overspending that is driving its voracious debt appetite to plug the shortfall.

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