Raila demand audit of Sh213.4billion loan borrowing barely a fortnight to new fiscal year
Opposition leader and Azimio One Kenya Coalition chief Raila Odinga has cast doubt into the circumstances the president William Ruto’s administration has borrowed a whooping Sh213.4billion a week to the new fiscal year beginning July this year.
Through a quick dispatch to newsrooms earlier today, Raila questioned the strange borrowing at an exaggerated interest rate.
Raila is now demanding explanation to the country and audit into the alleged loan.
However, in a quick rejoinder to a local TV station, National Treasury Principal Secretary Chris Kiptoo said there is nothing wrong from borrowing through a local infrastructure bond at an interest rate of 15.84 per cent.
Raila questioned ted the source of the large internal debt, its timeliness in regard to the passing of the controversial Finance Bill 2023 and its abnormally high-interest rate of about 16 per cent compared to other local lenders.
“With the ongoing focus on the Finance Bill providing a perfect cover, the Kenya Kwanza administration has in recent days engaged in a suspicious spree of borrowing which the Azimio Coalition Party demands clarity on.” Raila noted.
He added that: “In a single day last week, the Kenya Kwanza administration borrowed Sh213.4 billion from local financial institutions. This debt has a number of curious and disturbing features. First, it took place just ten days before the start of Kenya Kwanza’s inaugural Financial Year, which begins on July 1, 2023. Secondly, this money was borrowed at an extremely high-interest rate of 15.84 per cent.”
The opposition leader put into question the motive and expenditure behind the lump sum amount, arguing that the said money cannot be consumed within 10 days nor is it allowed by the law.
“This single borrowing is almost half the total approved annual domestic borrowing of Ksh438 billion for 2022-2023. Last week’s borrowing of Sh213.4 billion came despite the fact that the regime has been borrowing all year.” He added.
“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?”
According to the Azimio party leader, such type of single-borrowing by the government affects the market liquidity compared to borrowing from the private sector.
He says the high-interest rate incurred through the loan will directly increase rates for the private sector and individuals.
“What is the impact of this single borrowing on market liquidity? He posed. “Why is the regime deliberately locking out the private sector from the credit market? The government has borrowed at 16 per cent, 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 administration understand or care about the impact of this reckless borrowing at extremely high rates, on businesses and individual Kenyans?”
