Civil society groups blast big ticket infrastructure for ‘creating’ Kenya’s debt crisis
Published on: October 26, 2020 11:16 (EAT)
Civil society groups (CSOs) under the moniker Okoa Uchumi have faulted the government’s obsession with big ticket infrastructure projects for saddling Kenya with high debt. In a statement issued on Friday, the CSOs committed towards working to redress Kenya’s public debt crisis further states the multi-billion shillings investments have had no effect in impacting the lives of Kenyans for the better. “The government should stop implementing expensive projects that are driving debt, yet no benefits are trickling to common citizens at the grassroot level. For example, the impacts of the inland terminus and SGR on residents and businesses of Mombasa has caused loss of livelihoods,” read part of the statement. The platform has now adopted a number of resolutions in their push for a debt redress including a lobby to government to scoop up available debt relief options to cushion the economy from effects of the COVID-19 pandemic. Additionally, the groups are pushing for an enhanced fiscal consolidation stance to include the review of tax breaks and exemptions. Further, the CSOs who include the Institute of Economic Affairs (IEA) and The Institute for Social Accountability (TISA) have urged for citizens involvement in public debt management. Big ticket infrastructure have gobbled up billions in budgeted funds but some projects have drawn sceptics such as the extension of the SGR to Mai Mahiu (Phase 2 A) which has earned the name- ‘rail-road to nowhere’. President Uhuru Kenyatta has however fought back against the criticism insisting the project is a vision into the future and that it will open up urban centres along the line to economic development. The stock of public debt has soared astronomically under the Jubilee administration to push the alarm of debt sustainability. Kenya’s stock of debt has continued to soar under the pandemic and surpassed the Ksh.7 trillion mark in August. According to a recent report by the Parliament Budget Office (PBO), Kenya is expected to hit its adjusted Ksh.9 trillion debt ceiling, two years ahead of projections by June of 2023. Kenya is presently staring at a debt refinancing crisis as it deploys half of its tax revenues in the 2020/21 financial year to repay debt. Kenya’s current debt has already broken other ceiling including the 70 per cent of GDP nominal threshold.