Nairobi County debts rise to Sh48b

Nairobi County debt level has hit Sh48 billion up from Sh32 billion in 2013, according to fiscal strategy paper and debt management paper.

According to the Nairobi County Assembly budget committee chairman Michael Ogada, the public debt growth was attributed to accrual of interest and penalties.

Mr Ogada said that the public debt is reaching unsustainable level requiring urgent intervention.

“Measures on how to settle financial commitment with commercial banks, pay creditors and prudently implement collective bargaining agreement without injuring the county financial longevity need to be explored in line with strategies contained in the debt management strategy paper 2017,” states the report by the budget committee.

Mr Ogada also wants the national government to provide details of guaranteed loans which were repaid and those still not paid.

On the other hand the amount owed to the county government by the national government has risen from Sh63.5 billion in 2013 to Sh208.9 billion in 2016.

He however dismissed an explanation by the county finance executive terming it not convincing over the ‘unwarranted debt growth.’

The committee is also demanding the executive to make public and implement a report by a taskforce appointed by Nairobi Governor Evans Kidero on pending bills.

“The taskforce was mandated to tabulate with exactness the county pending bills as well as draw a marshal plan on how to sanitise the account receivable in the county’s financial reports however the work of the taskforce has not been alluded in the debt management paper 2017/18,” said Mr Ogada.

In a bid to tackle the growing debt, the county has decided to pursue debt rescheduling, external borrowing, borrowing from money and capital markets, debt/asset swop and debt write offs.

On the County Fiscal Strategy paper 2017/18, the executive stated that it will ensure that both the level and rate of growth in debt is fundamentally sustainable since high debt portfolio will continue to impact negatively on county operations.

City Hall will reduce county expenditure at the same time come up with mechanisms to increase revenue as the basic methodology for freeing up funds for development and debt servicing.

“Timeliness in debt servicing and remittance of statutory payments will be adhered to, to reduce interests and also avoid penalties,” stated the Fiscal strategy paper.