Kenyan government has written to the World Bank requesting for a Ksh75 billion loan, in its escalating appetite for loans geared by falling revenue collections and maturing debts.
The loan, according to media reports, has been described as Inclusive Growth and Fiscal Management Development Policy Financing.
According to a letter written by President Uhuru Kenyatta and Treasury CS Henry Rotich, the loan is set to top up the 2019/2020 budget on the government’s Big Four Agenda.
This will cover the four pillars of the government agenda like affordable housing, enhance farmer incomes and food security, create fiscal space to allow the government invest in key development programmes, and crowd in private investment and leverage digitisation to support the government’s inclusive growth agenda.
According to reports by Daily Nation, the loan is already facing opposition from some countries citing weak financial public management systems.
Currently, Kenyas debt-to-revenue ratio has escalated to 38 percent from 17 percent in 2002, when Kibaki government took over. The debt-to-GDP ratio has also escalated to 58 percent as of 2018, as the public debt crossed the Ksh5 trillion mark.
Experts have been warning of Kenya’s rising debt and its ability to service the loans with a big chunk of its revenues being lost to corruption, while the better part goes to recurrent expenditure.
The Ksh75 billion loan requested is not tied to any project, and is also prone to such loses as witnessed before where the country has been unable to explain the expenditure of previous loans.
The World Bank is yet to approve the loan.