Opposition leader Raila Odinga has accused President William Ruto’s government of borrowing excessively at a time when the country is grappling with ballooning public debt.
Mr Odinga has warned the National Treasury and all ministries involved in borrowing that they will not escape accountability.
In a statement to newsrooms on Tuesday, the Azimio La Umoja One Kenya coalition leader took issue with Kenya Kwanza’s ‘high appetite’ for loans secured under the cover of the ongoing debate on the controversial Finance Bill, 2023.
Mr Odinga claimed that in a single day last week, the government borrowed Sh231.4 billion from local financial institutions at a high-interest rate of 15.84 per cent.
“Azimio is convinced that the country being deep in debt, the Kenya Kwanza is continuing to borrow money at extremely high rates to pay questionable pending bills owed to politically connected contractors, without following the law, in return for bribes,” states Mr Odinga.
He has condemned Ruto’s government for borrowing, especially the money secured just days before the end of the current financial year.
He claims this money was borrowed at an extremely high interest rate of 15.84 per cent.
“With the ongoing focus on the Finance Bill providing a perfect cover, the Kenya Kwanza administration has in recent days engaged in a suspicious borrowing spree,” he said.
He has questioned the timing of the borrowing, which comes just a week before the end of the 2022/2023 financial year.
“Where is all this money going, a week to the beginning of a new financial year? Kenyans deserve a full account. Why such massive borrowing just about a week to the end of the old financial year and the beginning of a new one? Can the regime consume Sh213.4 billion in one week,” Mr Odinga posed.
He questioned the impact of this single borrowing on market liquidity.
He has also expressed concern that a number of investors have been locked out of the credit market and that this will have a negative impact on businesses.
“The private sector, including small businesses will end up paying very high interest rates of 24 per cent or more on their loans. Does the (Kenya Kwanza) administration understand or care about the impact of this reckless borrowing at extremely high rates, on businesses and individual Kenyans,” read the statement.
He continued, “In this latest borrowing, the regime announced a Sh60 billion bond. What law did the regime use to change the size of the bond mid-stream?
He challenged the Kenya Kwanza government to show the infrastructure projects that will be financed by the said bond within a week.
The statement comes as MPs are engrossed in debating the Finance Bill 2023, now on its Third Reading, with Kenyans piling pressure on them to caution them against the skyrocketing cost of living.
While reading the Sh3.6 trillion budget for the 2023/2024 financial year last week, National Treasury Cabinet Secretary Njuguna Ndung’u revealed that the government’s focus is on improving the economy through food security and climate change mitigation.
President Ruto has maintained that his government will not borrow to service his inaugural budget, but will raise revenue locally to settle the public debt left by the regime of outgoing President Uhuru Kenyatta.
When the Kenya Kwanza took power on September 13, 2022, Kenya’s domestic public debt stood at Sh4.328 trillion.
Currently, the domestic public debt stands at Sh4.547 trillion. This translates to Sh219.16 billion in nine months under the Kenya Kwanza government.
