Economy not as bad as opposition claims

By: BETH MUGO

The opposition wants to ruin this country through unfounded propaganda on the state of Kenyan’s economy.

The state of the economy is not as gloomy as Cord politicians would like Kenyans to believe.

Government borrowing is a useful measure of a country’s indebtedness.

Kenya’s indebtedness did not start with the Jubilee government. It started to worsen in 2008.

It is common practice for a country to borrow in order to fund infrastructural development.

This is not unique to Kenya. Similarly, capital expenditure is essential to address infrastructural gaps as well as social spending.

Kenya’s infrastructure needs are as a result of many years of limited investment in the sector and the demand for an emerging economy.

The benefits of a developed infrastructure are felt for many years.

MOST INDEBTED COUNTRIES

The United States of America relies on infrastructure that was put in place over 80 years ago during the Great Depression, probably from borrowed money.

Among the top 15 most indebted countries are Japan, Belgium (the seat of the European Union), and the US.

The International Monetary Fund (IMF) ranks Kenya at 72nd out of 182 countries according to indebtedness.

Indeed, in the latest World Economic Outlook (October 2015), Kenya is one of 14 countries out of 45 that IMF does not rank as heavily indebted in sub-Saharan Africa.

The IMF had forecast Kenya’s indebtedness to peak in 2015 and decline thereafter.

It is also worth mentioning that during the global financial crisis, other countries also became more indebted — the United States’ debt increased by 50 per cent while Greece, Portugal, and Ireland had their indebtedness increase by between 66 per cent and 150 per cent. Kenya’s debts increased by 27 per cent.

CLEAN BILL OF HEALTH

In July 2015, the Moody rating agency affirmed Kenya’s domestic and foreign credit rating at B1.

The agency indicated that this reflected the country’s robust growth potential, its leadership in the East African region, and the commitment to structural reforms.

It affirmed that the outlook for the country was stable.

It singled out devolution as bearing a significant effect on the wider government budgetary deficits.

Leaders should not lie to Kenyan’s on where the country is headed.

STALLING ECONOMIC GROWTH

They must take responsibility for their actions because freedom of speech does not mean sending the wrong signals to the public.

Building a state of fear, uncertainty, and unpredictability is not good for a country’s economic health as it gives room for speculative investors and stalls economic growth.

This is not the path we want to take.

Bad publicity contributes to economic slowdown by scaring away potential investors.

This affects employment creation and national revenue.

Eventually it is the common person who suffers.

Leaders must be patriotic and have the welfare of the country at heart.

The Bretton Woods’s institutions have given the country a clean bill of health.

SOURCE: DAILY NATION