September 22, 2019

Kenya warned by World Bank of public debt risk

By Jamhuri News Reporter

The World Bank is currently warning Kenya saying the country is currently at risk of turbulence due to a fast increase of public debt.

According to Daily Nation, The Wold Bank says balancing both the risks of borrowing and borrowing to finance the ongoing mega infrastructure projects would help the country in the long run.

“Any borrowing to support infrastructure projects should be done judiciously,” said Ms Chuhan-Pole

Details from the treasury indicate that as of December 2016, Kenya’s total public debt topped sh.3.827 trillion which equals 51.50 percent of the GDP in December 2016.

Kenya has been urged by the International Monetary Fund (IMF) to lower budget deficit so as to have flexibility in managing current debts. The government has however continued to ignore these warnings.

RELATED: IMF pushing Kenya to scrap interest rate capping law

Last month president Kenyatta commented on the issue saying he ” want to assure Kenyans that at no point has the country been at risk of default,”.

The president added that the country is not borrowing for consumption or recurrent expenditure but to build infrastructure that will in return transform the country’s economy.

The world Bank said that Kenya needs to first reform its public investment method so as to attract more private investors.

 

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