Deputy President William Ruto now says he has formulated a three-step plan that he will implement in a bid to reduce and manage Kenya’s debt if elected the Head of State at the August polls.
DP Ruto, speaking during the 2022 presidential debate at the Catholic University for Eastern Africa (CUEA) on Tuesday night, said the country’s debt – which presently stands at around Ksh.8.6 trillion, according to date from the National Treasury – is absolutely manageable if the right measures are taken.
He said his Kenya Kwanza government will first halt all borrowing immediately, then put a stop to projects that are not in the government budget, and finally find ways of increasing revenue.
These three measures, he said, will enable his government to cut down on the debt accumulated by the President Uhuru Kenyatta-led regime.
“I believe it is reckless for anybody to say we cannot pay our debts. I believe that we have what it takes to pay our debts. We have a plan as Kenya Kwanza on how to manage debt. We will first slow down on borrowing,” he said.
“We will put brakes on unbudgeted projects; in fact, that is the biggest source of our problem. Projects that are not within the budget, so that we cannot keep our fiscal deficit at what we have committed; 5% or 5.9%.”
He added: “We need to raise our revenues. We have areas that we believe that we can raise our revenue. For example, we collect 52% of all collectible VAT, just by automation and computerization, we can actually raise 95% of all collectable VAT.”
According to the DP, automation of collectible VAT will enable the government to collect an extra Ksh.400-450 billion.
“And added on to that, if we raise that kind of VAT, we can equally raise from corporate tax an additional Ksh.150-200 billion. So there is room for us to raise additional revenue for us to manage our debt, without necessarily saying we’re going to negotiate our debt,” he stated.
The Kenya Kwanza chief further claimed that, during the first term of the Jubilee government, they borrowed Ksh.2.2 trillion; but that Ksh.4.2 trillion has been borrowed since the handshake between President Kenyatta and opposition leader Raila Odinga.
“Unbudgeted projects are in the region of Ksh.100 billion, and that is what is spiraling our borrowing. That’s why if you go to the website of the Ministry of Finance, you will hardly find any paperwork there. Because there are too many projects that cannot be accounted for that are being done without a budget line,” he said.
“If you look at the expenditure on contingency fund, which is supposed to spend only upto 5% of the budget, sometimes it goes to 50% of the budget.”