Farmers Party Leader Criticizes Government Debt Management and Calls for Realistic Solutions
In a recent statement, Irungu Nyakera, leader of the Farmers Party, has issued a stark warning about Kenya’s debt crisis, urging a candid discussion about the country’s financial challenges and the responsibilities of potential leaders.
Nyakera highlighted the current state of Kenya’s debt, emphasizing that the government’s reliance on borrowing to meet recurrent expenditures is a significant concern. According to Nyakera, this situation deviates from the stipulations of the Public Finance Management (PFM) Act, which aims to ensure sustainable fiscal policies.
“Let’s have an honest conversation about debt,” Nyakera said. “The government has two main ways of raising funds – taxes and borrowings. When taxes don’t match expenditure, the government borrows. For Kenya, things have not been rosy.”
Nyakera revealed that a substantial portion of the tax revenue collected is being used to service debt rather than fund development projects. “Of all the taxes collected, 61% goes to paying loans – most of which were borrowed by the previous regime,” he stated.
The Farmers Party leader provided specific figures to illustrate the gravity of the situation. During the fiscal year 2023/24, Kenya is expected to pay KSh 631 billion on domestic debt interest and KSh 230 billion on external debt interest. In the current fiscal year, these figures are projected to rise to KSh 750 billion for domestic debt interest and KSh 260 billion for external debt interest. “This translates to KSh 2.8 billion a day on interest payments alone,” Nyakera said.
Nyakera also addressed critics of the current administration, challenging those who seek to assume leadership without acknowledging the financial realities. “To those that want to unconstitutionally take over from the president imagining that all he does is sit at State House drinking tea all day, start figuring how you will raise the KSh 3 billion a day, before you do any development work. Good luck,” he remarked.
Nyakera’s comments reflect growing concerns about Kenya’s fiscal health and the sustainability of its debt levels. His call for a realistic appraisal of the financial challenges facing the country underscores the need for informed and responsible leadership in addressing Kenya’s economic issues.
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