Amani National Congress leader Musalia Mudavadi has challenged the National Assembly to review the debt ceiling to avoid sinking the country into bankruptcy.
In December 2014, the MPs pushed Kenya’s debt ceiling from Sh1.2 trillion to Sh2.5 trillion to allow President Uhuru Kenyatta’s jubilee administration to borrow more to finance infrastructure projects.
But Mudavadi said that little can be said of the “so-called infrastructure projects” noting that the move by the MPs was wrong and that they should exercise their mandate on borrowing caps “to reign in this rogue government.”
“It is enough to take an economy through depression when borrowing outstrips GDP. However, local borrowing crowds out private sector borrowing because of increases in interests rates. Kenya is doing badly in business investment and retention,” Mudavadi said.
He noted that the economic depression in Kenya is artificially created to feed the elite and the hand of corruption cannot be fixed.
Mudavadi’s concerns come after data from Central Bank of Kenya indicated that Kenya’s public debt rose to Sh3.6 trillion by June this year from Sh1.8 trillion when jubilee came to power in March 2013.
The outstanding public debt is shared equally between domestic and external debt.
The office of the auditor general has indicated that the increase accounts for 93 percent over the period of jubilee rule.
This means that the country has been loaned more than 50 percent of the gross Domestic Product with a budget deficit of more than eight percent of the GDP in the current financial year against the average of three percent.
Last week Mudavadi while addressing the Rift Valley Law Society of Kenya, noted that the national government has embarked on a reckless borrowing spree for turnkey projects.
“Many may not understand that the government
He continued, “Every grand project is initiated or implemented with only one goal in mind; to feed an insatiable mad rush to steal through inflated tenders.”