Kenya will be spending more than half of the collected taxes on repaying loans starting next year, in a shocking reality following an era of aggressive borrowing. It could get worse should the Kenya Revenue Authority (KRA) fall below the collection targets, with loans including the Sh20 billion Eurobond starting to fall due. Official documents indicate the first portion of the Eurobond worth Sh80 billion will be repayable within the financial year that starts on July 1, 2018. More pressure is expected from the massive loans granted by China for several infrastructure projects – specifically funds spent to build the Standard Gauge Railway. Spending projections presented to Parliament in the supplementary budget show that more than Sh700 billion will be spent on loan repayments alone. Adding the repayments to planned social programmes such as free education and healthcare, it is easy to see that Kenya can only borrow more to keep going. Opinions on the implication of spending more than half of all revenues to repay loans is highly divided, and often informed by political affiliations rather than reason. Institutions that would typically provide an independent assessment such as the International Monetary Fund have flip-flopped on the subject in their contradictory opinions.
With all these layoffs people will be filing NIL returns at a high rate this year
interest rates won’t be changed. imf can eat a sausage
This should make the government wake up. That it can tolerate corruption when it needs every cent to pay back loaners.
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This debt issue was discussed in a longer thread jana. Debt isn’t inherently a bad thing; the problem is what it is incurred for, and whether you can pay it back as stipulated. Kenya has not yet defaulted on repayments, nor has our debt ‘overheated’. What we all agree (I’d like to think) is that the govt needs to be a lot more proactive in ensuring that expenditure is appropriate (reduce corruption and wastage on unnecessary expense).
so what would peasants do? The 20k penalty is a pipe dream to them
Can post a negative return.
The reason why these international organizations wail about our debt levels is because it is not them who own most of the debt but China and Japan.
Yes. It’s jealousy that motivates them to keep releasing these warnings.
For the economists around, how does tax collection influence paying foreign debts, I am sure the Chinese or Japanese or Europeans can not accept Ksh as a form of payment, that part I have never understood the workings of international finance.
This debts will be a blessing in disguise we use a lot of of our resources to pay our elected leaders. We are over represented I pray tushindwe kulipa we go for a referendum we reduce greedy politician na tupunguze Hizi county. Hii mzigo imekuwa too much.