Our debt is sustainable, CS Rotich says on 2018/19 budget
Kenyans will have to fork out even more in the next financial year to tend to the increasingly national debt.
According to the budget estimates presented to the national assembly, the Kenyan taxpayer will contribute individually to the service of Sh870 billion in money owed to creditors over the 2018/2019 financial year alone.
The figure has raised the alarm amongst most Kenyans but the National Treasury maintains that the debt remains sustainable.
National Treasury Cabinet Secretary Henry Rotich said lending is a standard practice for developing states like Kenya arguing the accruing debt has been as a result of pressing expenditure needs by government in the wake of increased infrastructural demands.
“Balanced budgets are good because you don’t accumulate debt but there are not easy to achieve in light of the development nature that we are in. Countries still developing are better of borrowing to sort out their infrastructural issues now for the economies to grow,” Mr Rotich told Citizen Digital.
The Treasury boss was however cognizant of the need to exercise prudency in borrowing in the wake of increasing concerns over the rate of debt accumulation in the country.
Mr Rotich insisted that Kenya’s debt level was sustainable and that government was able to pay off some of the debt without leading the country into a blind alley.
“We are able to comfortably repay our debt without being insolvent. As long as we are able to repay this debt without consuming a huge chunk of our revenues in terms of servicing it, our debt is viewed as sustainable,” he added.
The government has remained under fire in regards to its external borrowing policy with institutions such as the International Monetary Fund (IMF) giving stern warnings on the rate of debt accumulation going as far as to review downwards, Kenya’s credit score in the last year.
The National Treasury has however expressed optimism in keeping Kenya’s fiscal policy a float.
The ministry has reduced the budget deficit in the next financial year to nine percent and aims to reach figures below four percent in the medium term.
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