Kenya's public debt is soaring yet again after the World Bank confirmed funding of Sh588 billion, which will add to the existing growing debt level in Kenya and reignite debates over whether the country's borrowing is sustainable.
The latest loan is expected to finance the important projects in the country. The new loan comes at a time when other loans from other lenders are weighing heavily on Kenya's finances.
Analysts say that the concessional loans obtained from organizations such as the World Bank are cheaper and have a better repayment period. However, they warn that every new loan increases the level of loan repayment that the government has to pay in the future.
The approval comes at a time when Kenya is trying to implement fiscal reforms in order to stabilize its economy, raise domestic revenue, reduce the budget deficit and keep on investing in strategic areas.The strategy used by the government to manage its debt is going to be faced with immense pressure, as the people in charge do everything possible to achieve a balance between the growth of the economy and the sustainability of the fiscal policy.
With the debt situation in Kenya worsening, the main question is whether the additional borrowing initiated is going to be enough to stimulate growth within the economy or simply led to an increase in the debt burden on the next generation.
0 Comments