Move to raise public debt ceiling worrying

It is worrying that the government intends to raise the public debt ceiling to Sh9 trillion by 2023. The acting Treasury Cabinet Secretary says maintaining the current debt cap will hurt the government’s ability to deliver the Budget goals while the Budget and Appropriations Committee chairman in Parliament says the country has surpassed its debt ceiling.

As a country, we need to ask why the debt cap has been breached and yet debt appetite has been getting sharper despite the little growth there is to show for it.

This is an inescapable debate given that the public debt repayment is gobbling up billions of shillings each year and the debt to GDP ratio has risen significantly from 42 percent in 2013 when President Uhuru Kenyatta took over, to 55 percent this year.

Indeed, the law in place restricts State borrowing to half the Gross Domestic Product (GDP). With the new space offered by Parliament on Wednesday, the Treasury will have room to borrow up to another Sh3 trillion come July 2023 from the current Sh5.8 trillion.

It has been stated a number of times, but we need to reiterate. Debt is not free money, and already the repayments are gobbling up more than half of the total revenues collected. In the year to June, Treasury spent Sh826.20 billion on repayments against the Sh1.49 trillion collected.

One of the ways of living happily is restricting oneself to what is affordable or finding new ways of raising production. Sadly, Kenya is not keen on cutting expenditure or prioritising it, although the Treasury keeps promising heaven but repeatedly failing to implement the so-called austerity measures.

Kenya’s salvation will come in reducing the wastage spawned by runaway corruption and seen in Auditor-General’s reports when questionable spending is flagged without showing attempts at making systems tighter

Allowing Kenya to borrow with abandon will only feed the ego of the demonstration effect seen in grandiose infrastructural works while the economy is stagnant and the taxpayer is trapped. Kenya must cut its coat according to its cloth.