KENYA has secured another Sh140 billion foreign loan, to finance the second phase of the Standard Gauge Railway amid concerns that the national debt has reached
unsustainable levels. President Uhuru Kenyatta secured the deal with the China Eximbank during his visit to South Africa to finance the SGR’s second phase from Nairobi to Naivasha. The details emerged amid concerns Kenya
was over-borrowing, with the Treasury expected to repay Sh67 billion this month alone. Two months ago, the Treasury borrowed
Sh60 billion to finance undisclosed infrastructure projects in the roads, energy, agriculture and water sectors – only months after floating a Sh250 billion bond in Europe. This was despite a warning by the Controller of Budget that increasing public borrowing “may result in undesirable fiscal consequences such as high interest rates, inflation, and overburdening of future generations”. “It is recommended that the National Treasury should take appropriate measures to ensure the public debt does not reach unsustainable levels,” COB Agnes Odhiambo said in her Budget review report. By June 2015, the total public debt had increased by 20.3 per cent from Sh2.36 trillion in June 2014 to Sh2.84 trillion – 53.1 per cent of GDP. The details of the new loan emerged as State House announced the deals President Kenyatta sealed in his eight days’ visit abroad that included attending the Forum on ChinaAfrica Cooperation (FOCAC) in South Africa. “On the margins of FOCAC, Kenya and China signed a financing package for the extension: China Eximbank will provide a $1.5 billion loan, 85% of the financing, while Kenya will provide the balance,” State House Spokesman Manoah Esipisu said. Part of the package, which will be separately funded, is the expansion and modernisation of the Inland Container Depot in Embakasi. “The National Treasury and China Eximbank will soon finalise compliance, before disbursement and the start of construction,” Esipisu revealed. To catalyse social and economic activity along the
catchment area of the SGR route, State House said, China will invest in the construction of an industrial park in Naivasha, using steam power. “Some 25,000 Kenyan engineers and workers will be hired on the project; while 15,000 local skilled workers and 400 engineers are being mentored,” State House said. The first phase of the SGR project from Mombasa-Nairobi gobbled up Sh327 billion, with China’s Eximbank funding 90
per cent of the project, while the other 10 per cent is provided by the Exchequer. Opposition chief Raila Odinga claims Jubilee is over-borrowing, over- spending and over-stealing, amid concerns that the State cannot pinpoint specific projects it rolled out with the Sh250 billion Eurobond cash. On Friday, Treasury CS Henry Rotich and PS Kamau Thugge said the last financial year’s Sh270 billion development budget was financed from various sources
and wired to the ministries as a bloc. This consisted of Sh171 billion from the Eurobond, Sh36 billion from donors and Sh63 billion from the Exchequer. “You know, the Kenyan shilling is not coloured red or blue. So this is the difficulty ministries are having, since they cannot tell this is money from the sovereign bond or the other sources,” Thugge told the press
Railway will open up central rift,sahi plan to buy a plot in naivasha,am not sure if the design is out,mambo ya public debt achia third force
LOL. The purpose of the Naivasha rail line is to connect his recently acquired 22,000 acre farm. Anatumia wakenya kuchukua personal loan. Endeleeni kuumia.
Nani?
Hata eurobond ilichukuliwa na hatujui iko wapi. Tumezoea
Nice catching phrase that shows the worthiness of the loan
americas is 108% of their gdp.
as long they dont borrow and pocket everything.
https://en.m.wikipedia.org/wiki/National_debt_of_the_United_States
Kenya kuna that much engineers?
can debt ratio of a developing country be allowed to go that high USA is developed
yes depending on what it is used for but uhuruthieves hawatupeleki anywhere
all i want to know is nani alikula iyo interest accrued from the 250 billion when it was transferred to a consolidated fund offshore