How Kenya borrowed Ksh4.5 Billion daily for three months

Treasury CS Ukur Yattani. [Photo courtesy]

In the first three months starting March when the first coronavirus case was reported in Kenya, the government borrowed Ksh4.5 billion daily making it the fastest borrowing spree ever by an East African country.

In a month, the debt soared to Ksh136 billion a month.

The borrowing spree is attributed to projected simulations by experts from the Ministry of Health who warned that the rate of infections could soar and to beat it, Kenya needed to have a huge financial muscle to respond effectively.

Ukur Yatani led National Treasury embarked on a borrowing spree from global lenders, the World Bank not being spared either.

According to the Daily Nation, the monies went to the Health ministry which would later disburse the funds to the counties through the COVID-19 emergency funds.

With the case now going down in what many say is the curve flattening, Kenya’s debt continues to pile to Ksh6.6 trillion according to CBK data having an additional Ksh410 billion borrowed in the last three months when coronavirus bit hard.

Ksh303 billion was sourced from international markets and Ksh107 billion was borrowed locally.

Even as the debt soars, the number of unemployed youth who are in their most productive years has also risen to over 1.7 million.

The latest KNBS Quarterly Labour Force Report cites that the highest proportion of the unemployed was recorded in the age groups 20-24 and 25-29, each registering over 20 per cent.

“The same age groups also had the highest increase of over 10 per cent each in unemployment over the three-month reference period,” the report indicates.

This comes amid a storm over the theft of Ksh7.8 billion seconded to the Kenya Medical Supplies Authority (Kemsa).

Kemsa is pondering its next move as it is currently stuck with PPEs worth billions of shillings which it cannot sell.

Counties have newly-built isolation centres with an improved bed capacity which are barely in use now that the curve is flattening.

Thus, the burden of loan repayment shifts to taxpayers who are already operating in a depressed economy.