Duale defends Eurobond II, says Kenya’s debt manageable

What you need to know:

  • Mr Duale said that the deficit in Kenya’s budget has been reducing every year since 2015.

  • He defended the Jubilee administration saying that the money will be channelled to development projects such as infrastructure.

  • He said for any country to grow, then it must invest in infrastructure and that can only be done through borrowing.

National Assembly Majority Leader Aden Duale has said that the multi-billion shillings loan secured by the government on Thursday was factored in the 2017/2018 budget by the Treasury Cabinet Secretary.

This comes amidst an uproar by economists, some Kenyans and leaders following the decision by the government to borrow Sh200 billion from international financiers.

Joining other leaders including Deputy President William Ruto who have defended government’s appetite for borrowing amid concerns that the country’s debt is rising to an unsustainable level and that the debt load could become unmanageable, Mr Duale said that Treasury CS Henry Rotich had explained to Parliament how Kenya would repay the loan.

DEBT LEVEL

The Garissa Township MP said that the country has the capacity to repay the loan and that the debt level in Kenya compared to its gross domestic product (GDP), which is now at 56 percent, is positive and sustainable compared to many other countries.

He said that the debt level of United States of America to its GDP stood at 100 percent while Japan’s is at 200 per cent of the GDP and that of the United Arab Emirates (UAE) is at 185 per cent compared to its GDP, yet the countries have thriving economies.

“The question we are asking is, is Kenya able to pay its debts? Yes. So the Sh220 billion Eurobond was factored in the 2017/2018 budget. He (Rotich) has convinced Parliament how to repay that money and every year he sends a cheque,” Mr Duale said on Saturday during the Annual Prize Giving Day at Nairobi Muslim Academy.

BUDGET DEFICIT

Mr Duale said that the deficit in Kenya’s budget has been reducing every year since 2015, stating that that is a positive sign for the country and a signal that it is borrowing less domestically.

He defended the Jubilee administration saying that the money will be channelled to development projects such as infrastructure, energy, human capital and other projects to improve the country and the lives of its citizens, adding that for any country to grow, then it must invest in infrastructure and that can only be done through borrowing.

“There is no country that grows in the world without investing in infrastructure. And any country that wants to invest in infrastructure must borrow and that is why you see countries that have grown higher like Singapore, Malaysia, Korea, japan borrowed at their initial stages.

STOP WITCH-HUNT

“So nyinyi watu wa magazeti acheni fitina mingi. Hiyo pesa tunakopa tunafanya maisha ya wakenya iwe sawasawa. (Let the media stop the witch-hunt as we are using the borrowed money to improve livelihoods of our citizens),” he said.

Meanwhile, the majority leader said that the government has devoted a lot of resources towards expanding access to education and retention of students in schools besides being committed to investing in the future of the children in the country through transformative education and training.

He said that the new curriculum that is being rolled out by the government through the Ministry of Education will provide children with an avenue for early specialisation while calling on Muslim leaders to champion for the inclusion of Muslim schools in the laws of the country including the Education Act.

EDUCATION

“It is through Islamic knowledge and education that the Muslim community will find resilience against violent extremism and radicalisation. We should not allow those who want to distort the true values of Islam to thrive,” he said.

Mr Duale called on the Muslim community to make a deliberate effort to integrate with the rest of the Kenyan society, lauding the efforts by the proprietor of Nairobi Muslim Academy Mohamed Osman Warfa in giving Muslim women a chance at education and an avenue to integrate with others in the community.

He was accompanied by several Muslim leaders including Marsabit Senator Godana Hargura, Mandera East MP Omar Mohamed Maalim, Mandera County Speaker Mohamed Khalif and Lang’ata MP Nixon Korir who promised to raise the level of education in the area by building more libraries and equipping laboratories in schools in South C.