The government borrowed an average of Sh2.62 billion every day for four months this year to finance capital projects and fight the Covid-19 pandemic, a new report has shown.
The report shows the National Treasury took Sh322.17 billion loans between May 1 and August 31.
National Assembly Majority leader Amos Kimunya tabled the report from the Treasury in the House. It shows the government procured 15 loans from bilateral and multilateral creditors within the period.
“Twelve of the loans are from the multilateral lender and three are from bilateral lenders. The total value of the 15 new loans signed is equivalent to Sh322,178,194,048,” the report reads.
The repayments of the loans, which will attract varied interests, start in 2025 and the government is expected to repay some of them by 2060.
“Four of the loans have been disbursed by the time of submitting this report [to Parliament],” the report says.
The loans, according to the report, will be used to finance infrastructure projects, including affordable housing, Covid-19 emergency response activities, Universal Health Care, energy, environment and youth projects.
A similar report tabled in the House in June showed that the government borrowed Sh132.3 billion between September 1 last year and April 30.
This implies that the country’s debt burden grew by Sh454.5 billion between September 1 last year and August 31.
Section 31 (3) of the Public Finance Management Act, 2012 requires the National Treasury to submit a report to Parliament on the country’s debt position every fourth month.
The new report follows a warning from international lenders — the World Bank and the International Monetary Fund — that Kenya’s ballooning debt may be difficult to repay.
Last Friday, President Uhuru Kenyatta hit out at foreign donors, apparently over their debt warning.
“I ask you to refrain from trying to direct us in which way we should go. We are clear about where we want to go. We ask you to join us, to support us in that endeavour. But do not interfere because we shall not allow you to dictate to us which direction that should be,” Uhuru said.
He spoke during the groundbreaking ceremony for the G-47 Ugatuzi Towers in Hurlingham, Nairobi.
The country’s external loan has increased four times in the past decade, the World Bank says.
It is currently at Sh3.66 trillion and combined with domestic borrowing at Sh3.46 trillion, Kenya’s total debt is Sh7.12 trillion according to Central Bank of Kenya data.