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Concerns over Kenya’s rising debt have intensified following the signing of a Ksh. 1.6 trillion loan by Treasury Cabinet Secretary John Mbadi.
The loan, signed with the China Development Bank (CDB), aims to fund various infrastructure projects, including the construction of rural roads, but has sparked strong reactions from political figures and economists.
Among the most vocal critics is businessman and politician Jimmy Wanjigi, who has raised questions about the legality of the borrowing.
According to Wanjigi, only a portion of the loan was approved by Parliament, while a significant amount remains unapproved. He labeled the unapproved funds as "odious" and stressed the need for the government to follow proper financial procedures when taking on new debt.
Wanjigi’s remarks reflect growing unease about Kenya’s increasing national debt, which has become a significant concern in recent years.
Many critics argue that the government’s borrowing practices are not transparent enough and that bypassing Parliament in such decisions could lead to serious economic consequences.
In his statement, Wanjigi emphasized that borrowing without Parliamentary approval could be a breach of Kenya’s budgetary laws. He warned that such actions undermine the checks and balances that are meant to guide government financial decisions.
By ignoring the legal requirement for Parliament’s consent, the government risks losing public trust and setting a dangerous precedent for future borrowing.
The Ksh. 1.6 trillion loan adds to Kenya’s already high national debt, which has been steadily rising over the past decade. The country’s debt-to-GDP ratio is now a major concern for financial experts, with some warning that continued borrowing could result in long-term economic difficulties.
Wanjigi, along with other critics, argues that reckless borrowing could place a heavy burden on future generations of Kenyans.
One of the key issues raised by Wanjigi is the potential for Kenya to fall into a "debt trap." This is when a country borrows more than it can repay, leading to a cycle of borrowing just to service existing debts.
If not carefully managed, this situation could cripple Kenya’s economy and limit the government’s ability to invest in critical sectors such as education, healthcare, and infrastructure.
Wanjigi also expressed concern about the impact this loan will have on ordinary Kenyans. With the country already struggling with high levels of taxation, inflation, and unemployment, adding more debt could further strain the economy.
If the government is unable to manage its debt, it could lead to higher taxes or cuts in public services, putting even more pressure on Kenyan citizens.
Despite these concerns, the government has defended the loan, arguing that it is necessary for the development of key infrastructure projects, including rural road construction.
These projects, according to Treasury CS John Mbadi, will boost economic growth by improving access to markets, creating jobs, and stimulating trade in rural areas. The government insists that such investments are crucial for achieving Kenya’s Vision 2030 goals.
However, Wanjigi and other critics remain unconvinced, calling for more transparency and accountability in the borrowing process. They argue that while infrastructure development is important, it must be balanced with fiscal responsibility to ensure that Kenya does not fall into a cycle of unsustainable debt.
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In the coming weeks, Parliament is expected to take a closer look at the details of the loan, particularly the unapproved portion.
Lawmakers may demand an explanation from the Treasury on how the funds will be used and whether the government is following the proper legal procedures in acquiring such loans.
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