Kenya should resort to more concessional loans from the World Bank and other multilateral lenders to shun expensively-priced commercial loans and reduce the debt burden.
We believe that concessional and semi-concessional borrowing can help the Treasury limit reliance on external borrowing in the coming years to reduce debt-related vulnerabilities.
Multilateral lenders can give Kenya a longer repayment period at a lower rate with a moratorium, which reduces the pressure on collected revenues.
Loans from lenders with high-interest rates and short repayment period have thrown us into a tight fiscal corner, which will affect the country’s middle and long-term growth.
Commercial debts since the Jubilee government came to power have piled up and are now expensive to repay, taking up more than 63 percent of tax revenue.
This is eating up a huge chunk of the country’s resources that could be used for development like improving road network, and expanding public education and healthcare, among others.
Even as we work to cut overreliance on commercial lenders and go for long-term loans, State should close all the loopholes that corrupt officials use to embezzle public resources.
It makes no sense to borrow while the country loses billions yearly to corruption. We have had instances where taxpayers repay loans that were never used for the intended purposes.
It is important that as we try to balance our debt portfolio, we also go after individuals who have plundered public resources with reckless abandon.