This comes a week after Deputy President William Ruto tore into the Jubilee government’s borrowing.
Speaking during a joint interview with his running mate Martha Karua on Tuesday evening, the ODM leader argued that there is nothing wrong with borrowing to invest.
“There is nothing wrong in a country incurring debts. If you borrow for consumption and not to invest, then your ability to repay becomes impaired but borrowing to invest enhances your ability to repay the debts,” said Mr Odinga.
While admitting that the country’s debt has soared, the former prime minister said the focus should be on what the development projects the money borrowed has financed.
“There is a need to look at what the debt has financed. We know that most of it did not go to do real development projects. Arror and Kimwarer dams are white elephant projects initiated during President Kenyatta’s first term when these debts were incurred,” he said.
He, however, hit out at Dr Ruto for making noise about ballooning public debt. He said the deputy president is also to blame for the huge debt Kenya is currently grappling with.
“People who are actually crying about the debts are responsible for those debts. Most of the debts were incurred during the Jubilee government’s first term,” he said.
President Kenyatta defended his government’s borrowing, which is projected to hit at least Sh6.7 trillion by the time he leaves office.
That will push the total public debt portfolio to Sh8.59 trillion by the end of this fiscal year in June, with the President saying it is necessary to fund infrastructure and accelerate economic growth.
Speaking during this year’s Madaraka Day celebrations, President Kenyatta dismissed critics, saying the debts funded massive infrastructure projects around the country.
“We must stop saying we are using other people’s money because it is not working. We are paying a trillion shillings every year on debt,” Dr Ruto said.
The Parliamentary Budget Office earlier this year projected that Kenya could spend up to Sh1.36 trillion in debt service by July. While public debt crossed Sh8 trillion in December last year, Parliament raised debt ceiling from Sh9 trillion to Sh10 trillion.
Mr Odinga explained that commercial debts with short term repayment period and high interest rates are not good for the country. He said he will renegotiate the short-term commercial loans with punitive interest rates.
Earlier this month, the Azimio leader said his government will only borrow “for purposes of viable projects that will finance the repayments and debt servicing and secure inter-generational equity.”
He also promised to pursue debt relief negotiations on the already huge public debt burden that President Kenyatta’s administration will be leaving behind.
He said he will seek to “reduce the pace of debt accumulation and develop policies that support sustainable debt levels and terms.”
“We will look into restructuring the debts so that Kenya is not overburdened by repayment,” said Mr Odinga.
“You don’t want to get into government and only work to repay debts and nothing else. We have analysed the debts we owe as a country and we know that it can be managed,” he added.
Meanwhile, Mr Odinga and Ms Karua have confirmed that they will attend presidential debates in July.