The World Bank has urged the government to slow down on intensive projects as the country continues to shoulder a growing debt. Chief Economist, Pinelopi Koujianou Goldberg, urges President Uhuru Kenyatta to consider the long term perspective and sustainability before seeking project loans.
The IMF gave similar warnings, urging Kenya to be cautious on piling debt after she amended her debt ceiling.
“It may be better to slow down, perhaps cut back on borrowing, and financing big projects,” Pinelopi Goldberg told Bloomberg. “Take more of a long-term perspective and make sure the way these projects are financed is truly sustainable.”
By October 2019, Kenya’s public debt hit KSh6.029 trillion with Treasury estimating it to grow to KSh6.45 trillion by June 2020. However, the country is struggling with thinning revenues, unable to finance its infrastructure and recurrent expenditure. Still, the Big four Agenda continues to demand more money.
The President has until 2020 to complete the Big Four Agenda, which is still far from completion. For instance, only 228 out of 500,000 affordable houses are complete. This is besides providing equipment for hospitals under the universal health care plan, as well as doubling electricity penetration before his term ends.
Golberg warns that funding the Big Four Agenda by 2022 will exaggerate pressure on government borrowing, thus impeding growth.
SEE ALSO: Treasury Needs Austerity Measures to Reduce Mounting Debt
