We can't borrow even for good projects - CBK Governo

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The Central Bank of Kenya has warned that the country does not have any more headroom left for borrowing to finance development projects.

CBK Governor Patrick Njoroge on Wednesday said our borrowing has reached the maximum limit and the focus should now shift to Public Private Partnership non-debt models for projects.

The International Monetary Fund officials had warned that country’s excessive borrowing amid huge revenue deficit for the economy is worrying.

Kenya’s debt stands at Sh4.6 trillion as of November last year.

“The headroom (for borrowing) has now decreased. We cannot continue borrowing for spending on even the good projects. We need to move into the non-debt financing of our development projects,” said Njoroge.

Speaking during the media briefing on the scorecard of the Vision 2030 to the economy 10 years since its launch, Njoroge, however, said the county’s debt is sustainable.

The CBK Governor gave an example of the proposed Sh300 billion Mombasa-Nairobi Express Highway, which the government wants to partner with private entities to build the new six-lane expressway by American construction company, Bechtel.

The said private-public-partnership option will allow a company or a set of companies build the road and then recoup their costs by charging tolls.

“Mombasa- Nairobi Express Highway is one of the PPP project that is non-debt. We did look at the financing proposals and are quite exciting. It takes a little longer, but the benefits look like it is done correctly and this may be good example of such non-debt project,” he said.

However, Dr Njoroge warned that before settling for such proposal, there is need to make sure that there is enough consultation and stakeholders’ engagement.

“PPPs are one set of options that may or may not work in some projects, its is not a sought of a silver bullet, it needs to be applied correctly,” he said.

Vision 2030 Delivery Board, Dr James Mwangi said the Kenya’s debt is manageable, but the government cannot continue to borrow to finance projects.

“Our current debt is sustainable, but we do not have headroom for more borrowing. We can borrow in case of emergency, but not for roads or any other project. We have to retain that headroom by engaging in PPPs,” he said.

He said however in fullness of time, Kenyans will come to appreciate when they start getting returns of the projects in which these debts were used on.

“The SGR, education, health, port of Mombasa, the airports and roads are some of the projects that require huge capital investment. The government has done what it was supposed to do and in fullness of time, we shall see results,” said Mwangi.

Yet all our elected leaders from MCAs to Governors want higher salaries. Very soon taxation in Kenya will hit 40%

A competent government would go into austerity measures, slash recurrent expenditure, we spend more than half of our revenues on day to day running of government yet get very little returns because civil servants spend very little time doing what they are hired to do.

High taxation expected. Soon, Many in formal employment will quit their jobs to try investing in popular urban businesses (chapo biz, car wash, bioutiques, uber and loads of moody businesses) We are heading for tough times…recession-depression-war

Hopefully we revolt and recover the loot. There is enough stolen money to pay atleast half of our national debt

Spear likes this

Not very soon

That phrasing ‘We do not have headroom for borrowing’ from two different bodies heads is interesting.

Njoroge ni kama pia amechoka na government
He is quoted saying this,

[SIZE=7][COLOR=rgb(71, 85, 119)]"[/SIZE][SIZE=5][COLOR=rgb(71, 85, 119)]This is not time for hubris. This is time for action. Make no mistake, the CBK is under attack. This is a summons to act and courage to defend and strengthen it, reviving our hope in a common vision of a modern central bank at the heart of a vibrant financial system.[/SIZE]
[SIZE=5][COLOR=rgb(71, 85, 119)]I have been warned variously about certain parties that lie in wait poised for mischief and that our actions have consequences. We are ready for that. That menace shall find us at our post and unafraid.[/SIZE][SIZE=7][COLOR=rgb(71, 85, 119)]"[/SIZE]

Business Daily article

he must have been sending salvos to Treasury.

Does that mean we intentionally borrow for bad projects?

yes. it’s all about eating in the pretence of infrastructure projects.

this bodies meant to oversee other bodies have become too much and are only eating into the much strained government revenue

pesa otas:D:D:D

Bitumen standards tutafanyaje? njoroge awache mchezo @spear ataanza kurecycle picha ama? His career depends entirely on pictures of tar. njoroge amelalia maskio hajajua bado?