By Billy Mijungu
Kenya’s debt situation has reached a point where we can no longer pretend that the warning signs are not flashing. Our current borrowing stands at about 68 percent of GDP. This means a Kshs 17.6 trillion economy is carrying a heavy load of Kshs 12 trillion in public debt. When you subtract this burden from our total economic value, our real net worth as a nation is only Kshs 5.6 trillion. That is the painful truth.
To make matters worse, Kshs 5.6 trillion is the same amount of revenue we collect in only two years. That means our entire national worth is equivalent to just two cycles of tax collection. That is how badly we are doing. It shows a country living far beyond its means, trapped inside a shrinking fiscal space.
What should be the fuel that powers national development has instead become a revolving door of wastefulness, inefficiencies and overwhelming debt repayments.
A huge portion of what we collect is consumed before it can touch the real economy. What remains after paying debts is too little to transform the country in any meaningful way. It is no wonder our development is of tokenism and stalls, An economy cannot run on fumes forever.
It is time to consider a bold, painful but necessary solution. We must plan to clear our debts at once. This may involve selling significant stakes in key national assets, restructuring ownership of institutions and boisterous regulation, decisions that are unpopular today but lifesaving tomorrow. Debt is slavery and Kenya cannot continue to live in this state of dependency. The nation must reset.
Future administrations must be restrained by a strict law that limits borrowing only to private public partnerships for income generating projects that can pay for themselves.
In addition, any national borrowing must be approved either through a constitutional referendum or through a parliamentary super majority of two thirds. No approval should pass without at least two thirds of County Assemblies supporting it, also by super majority. Our budget must never run on debt again. These safeguards must not be vulnerable to political convenience.
If William Ruto’s Kshs 5 trillion dream were to materialize under the current debt structure, we would have no economy left to stand on. We are already on full time fuliza. It is time to pay it off and rebuild.
