The Kenya National Chamber of Commerce & Industry has today held the first stakeholder forum on public debt management aimed at starting discussions on the increasing national debt as well as to understand the repayment obligations.
The forum which brought together policy makers, development partners, public and private sector players tackled diverse topics around the public debt management space including: the trends of Kenya’s Public debt, strategies that the Government can consider creating a more business enabling environment for economic growth and strategies to reduce Government expenditure as well as limiting government borrowing going forward.
Speaking at the event Director for Policy Debt Management at the Treasury Daniel Ndoho said the government was committed in ensuring that finances raised through debt either locally or internationally was well utilized to have maximum impact on all Kenyans. He however termed as a misconception that the national debt was out of control unfounded saying the country can take up a maximum 74% Debt to GDP as per World Bank figures.”
“We are committed to keeping our debt levels at a sustainable level and to ensure that all debt is utilized for the reason it was acquired. We have always sought to ensure that all projects are completed in the required period to ensure that Kenyans can start reaping the benefits early and to cut on costs arising from delays,” said Ndoho.
The Kenya National Chamber of Commerce & Industry on its part said the discussions would help guide the government on the various debt channels available at its disposal. This it said would help ensure that it’s financing needs and payment obligations are met at the lowest possible cost over the medium to long term, and that debt is assumed with a prudent degree of risk.
“If we compare government borrowing to revenue generation trend over the years, debt accumulation has been increasing at an alarming rate indicating widening gap and mounting pressure on government’s capacity to repay loans. The ability to generate and grow tax revenue is a strong indicator for future ability to repay loans,” said KNCCI National Vice Chairman James Mureu.
Other experts called on the government to consider making it compulsory that all debt is utilized for financing development expenditure, objectives for debt management be clearly defined and publicly disclosed, and the measures of cost and risk that are adopted should be explained, and treasury develop a comprehensive debt register which should be made accessible to the public.
Commenting on the same Emgwen MP Alex Kosgey said: “The oversight mandate of parliament should also be expanded to include the institutionalization of its consistent participation in the setting of the ceiling, sources, and purpose of domestic borrowing. Public debt and obligations should be maintained at a sustainable level as approved by Parliament (for National Government) and County Assemblies (for County Governments).”
Further treasury has been urged to prioritize infrastructure projects to ensure that the projects which bring greater value within a shorter term are implemented first. Another recommendation call for the need for monitoring and evaluation of mega projects financed through debt financing to demonstrate the impact on the economy before refinancing of such projects. Finally the experts call for the implementation of policies that make public investment more efficient to ensure public investment spurs economic growth and privatization of poorly performing state-owned companies.