Kenya defaults on Shs. 1.3 billion SGR debt? Treasury says No. Can government Run Itself?

5 mins read

It looks like the Ruto government is running itself most likely to the ground with millions of Kenyans stuck in a trailer behind them. It doesn’t look good at all. Actually, it is deadly.

Kenyans woke up to loud announcements in our media to the effect that the country has defaulted on its loan payments to the Chinese Banks for the trillions of debt on SGR. The loan default was costing Kenya Shs.1.312 billion this year.

When the scary information hit the news the Treasury Chief Mr. Yatani came out to declare that such information was completely false.

“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely.”

Yatani concurrently stated that SGR debt loan servicing is prioritised by the State in order to ensure the nation’s credit outlook remains positive.

“It is also important to note, that all public debt, including the SGR loans are paid from the Consolidated Fund in accordance with the Public Finance Management Act, 2012. Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure,” he said.

“We want to assure our creditors, development partners, investors, and the general public that Kenya’s financial position is sound and robust.”

On top of the interest, we also know that SGR suffered a loss of Shs. 3.4 billion for the year alone. That is a total of almost Shs. 5 billion a year of Kenyan money going into the hole just on the SGR alone.

Kenyan economy faces some real-time bombs and if they are not handled properly with this new confused Ruto government, the country could very easily follow Sri Lanka into bankruptcy. That is the kind of stuff that brings whole countries to their knees and helpless. That is coming unless people in government wake up.

Kenya’s debt today is Sh8.58 trillion under and the cost of servicing public debt is at a record Sh1.39 trillion in the fiscal year through June 2023, which is more than half of the projected State revenue in the same period.

Kenya spent almost 57 percent of taxable income in the past financial year on repaying loans, according to the Treasury, underlining the effects of the mounting public debt on State finances. In other words, we are staring at a real possibility of state bankruptcy with a government that has no source of funds after promising a million things to Kenyans that they can never deliver.

And now that government probably can’t borrow money either and there are no foreign governments plus international agencies lining up grants and aid to our country with the kind of toxic government we have today. Kibaki had that luck when he took over from the Moi dictatorship in 2002. Foreign countries and international agencies were pouring money into the economy like never before.

Not this time. Ruto is now busy cleaning up all economic thieves. Robbers facing corruption charges are having those charges withdrawn in a hurry. No country in the world is going to offer any financial help to a government like that. We are on our own with William Ruto.

Kenya is going to face some serious economic survival battles and if not handled smartly, the country could sink right before our eyes. With have little babies trying to run the country and they are very good at opening their mouths and nothing else. You can run your kiosk like that. Not a country called Kenya.

Adongo Ogony is a Human Rights Activist and a Writer who lives in Toronto, Canada

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