Azimio la Umoja One Kenya Coalition Party Leader Raila Odinga is now demanding an explanation from the Kenya Kwanza government over the alleged borrowing of Ksh.213.4 billion just a week before the beginning of the new financial year.
Azimio leader Raila Odinga in a statement on Tuesday questioned the President William Ruto-led administration over what he termed as “suspicious” borrowing, saying that the State should come clean regarding the new debt.
Odinga questioned ted the source of the large internal debt, its timeliness in regard to the passing of the controversial Finance Bill 2023 and its abnormally high-interest rate of about 16 per cent compared to other local lenders.
“With the ongoing focus on the Finance Bill providing a perfect cover, the Kenya Kwanza administration has in recent days engaged in a suspicious spree of borrowing which the Azimio Coalition Party demands clarity on,” Odinga stated.
“In a single day last week, the Kenya Kwanza administration borrowed Ksh.213.4 billion from local financial institutions. This debt has a number of curious and disturbing features. First, it took place just ten days before the start of Kenya Kwanza’s inaugural Financial Year, which begins on July 1, 2023. Secondly, this money was borrowed at an extremely high-interest rate of 15.84 per cent.”
The Opposition leader put into question the motive and expenditure behind the lump sum amount, arguing that the said money cannot be consumed within 10 days nor is it allowed by the law.
“This single borrowing is almost half the total approved annual domestic borrowing of Ksh438 billion for 2022-2023. Last week’s borrowing of Ksh.213.4 billion came despite the fact that the regime has been borrowing all year.”
“Where is all this money going, a week to the beginning of a new financial year? Kenyans deserve a full account. Why such massive borrowing just about a week to the end of the old financial year and the beginning of a new one? Can the regime consume Ksh.213.4 billion in one week?”
According to the Azimio party leader, such type of single-borrowing by the government affects the market liquidity compared to borrowing from the private sector.
He says the high-interest rate incurred through the loan will directly increase rates for the private sector and individuals.
“What is the impact of this single borrowing on market liquidity? He posed. “Why is the regime deliberately locking out the private sector from the credit market? The government has borrowed at 16 per cent, the private sector, including small businesses, will end up paying very high-interest rates of 24 per cent or more on their loans.”
“Does the administration understand or care about the impact of this reckless borrowing at extremely high rates, on businesses and individual Kenyans?”
