Cancel poor states’ debts to hasten MDGs realisation

Last week, the world marked the Global Action against Debt and International Financial Institutions week with calls for immediate cancellation of debts.

Though activities calling for debt cancellation were staged by civil society organisations both in the North and South, the events were not covered by the mainstream media.

As we take stock of this important week in our calendar, it is important to interrogate how the enormous debt burden Kenya struggles under is affecting her quest to achieve millennium development goals.

Since the signing of the Millennium Declaration in 2000, the government has made considerable progress towards attaining the MDGs.

For instance, on eradicating extreme poverty and hunger in Kenya the percentage of the poor has dropped from 38 in 1992 to 20 by the end of 2005.

From 1990 to 2008, the percentage of the poor in sub-Saharan Africa decreased from 31 per cent to 27 while in Kenya it dropped from 22.3 per cent to 20.9 per cent over the same period.

The government has implemented a number of programmes to enhance poverty reduction.

These include enterprise funds for women and the youth that act as credit facilities, implementation of social welfare programmes such as Kazi Kwa Vijana (jobs for the youth), and a cash transfer programme.

These have helped reduce the number of people living below the poverty line.

Other initiatives include the implementation of the Economic Stimulus Programme (ESP) and subsidies on fertiliser and seeds which have increased agricultural productivity.

The debt crisis in Africa is a major concern as it misdirects the continent’s resources from essential human needs to loan repayment.

A major setback to the continent’s achievement of the MDGs is her indebtedness to creditors such as international financial institutions, commercial banks, and clubs of developed nations.

The Kenya government spends the bulk of her income to service loans and very little money is set aside for basic services such as healthcare and education.

Yet with all the money that goes into debt servicing, the debts are far from being cleared while the government is still committing itself to more borrowing due to fluctuating revenues and the need to expand the economy.

Currently, Kenya’s debt burden stands at Sh1.19 trillion.