Accountants raise concerns over Kenya’s increasing debt

 

Accountants have raised concern over the country’s borrowing habits and expenditure.

Through the Institute of Certified Public Accountants of Kenya, they said the growing national debt is becoming an excess burden to the country and a threat to national development.

ICPAK Chairman Fernandes Barasa said that the Sh691.5 billion budget deficit in the Sh2.26 trillion budget presented by Treasury Cabinet Secretary Henry Rotich for the financial year 2016-17 should specifically directed into development projects.

“We need to focus on development for growth. Over the medium term, the national government’s borrowing should be used only for financing development expenditure and not for recurrent expenditure,” Barasa told a press conference.

He explained that developmental projects allocations remained at a lowly 45 per cent whereas recurrent expenditure stands at about 80 per cent. A situation he described as unfortunate, since most of the borrowed cash end up being spent on recurrent expenditures.

“Public debt and obligations should be maintained at a sustainable level as approved by parliament for national government and county assemblies for county governments,” he added.

According to a monthly Economic Survey by the Central Bank, the country’s total public debt stood at Sh2.94 trillion as per December 2015, Sh460 billion or 18.55 per cent increase from Sh2.48 trillion in December 2014.

It means that about 58.9 per cent of Kenya’s wealth is in debt, a rise from 46.9 per cent in December 2014.

 

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