The Amani National Congress (ANC) leader, Musalia Mudavadi has urged the government to borrow loans prudently warning that future governments might be saddled with servicing of huge debt repayment burdens at the expense of development.
Speaking in Mwatate on Sunday during a funds’ drive for Mwatate Women Sacco, Mudavadi said loans are beneficial if they are put to the use they were intended for and called for more strict control of government borrowing.
The ANC boss said it was distressing that billions of shillings meant for national projects had been embezzled leaving the country with massive debts to repay yet there were no projects on the ground to show for the effort.
If we are not careful with our borrowing, the future governments in Kenya will only focus on loan repayment for money that was stolen instead of going into development projects, he said.
He appealed to the budget committee in the national assembly to scrutinize budget policy statements from treasury to ensure no frivolous and unimportant expenditure was slotted in the budget. He said parliament had a role to play in ensuring the government’s expenditure was controlled.
Mudavadi’s concern comes in the wake of rising public debt that has triggered concerns from finance experts. According to Economic Survey 2019, the government has a total external debt of Sh. 2.5 trillion. This comprises of loans taken from countries and international organizations.
China leads lenders with Sh. 560 billion worth of loans. Amongst international organizations, IDA/IFAD leads with loans totaling Sh. 524 billion.
According to the Public Finance Management Act regulation of 2015, parliament placed a limit on borrowing, stating that the national public debt should not exceed 50 per cent of Gross Domestic Product (GDP) in net present value terms.
Mudavadi appealed to parliament to ensure funds by government were put into good use to safeguard the public good.
The funds’ drive was attended by amongst others Taita-Taveta Governor, Granton Samboja, Senator Jones Mwaruma, MPs, Andrew Mwadime of Mwatate and his Voi counterpart, Jones Mlolwa.
Mudavadi is also expected to lead another funds drive for bodaboda sacco in Mwatate.
A total of Sh. 1.4 million was raised for the women sacco.
Source: Kenya News Agency