Kenya's Central Bank says the country does not have more headroom to borrow

david nganga

May 31, 2018 11:43 AM

Kenya’s total debt burden stood at Sh4.6 trillion as at November last year

Kenyas Central Bank has warned that the country has little headroom left for borrowing to finance development projects.

CBK Governor Patrick Njoroge on Wednesday said Kenya's borrowing has reached the maximum limit and wants the National Treasury to shift focus on Public-Private Partnership (PPP) and non-debt models for the financing of projects.

“The headroom (for borrowing) has now decreased. We cannot continue borrowing for spending on even the good projects. We need to move into the non-debt financing of our development projects,” said Njoroge.

He cited the proposed Sh300 billion Mombasa-Nairobi Express Highway, which the government wants to partner with private entities as the way to go.

Tolls

The model will allow a company or a set of companies build the road and then recoup their costs by charging tolls.

Dr. Njoroge however warned against settling on such proposals before engaging stakeholders and seeking enough consultations.

Kenya’s total debt burden stood at Sh4.6 trillion as at November last year with the International Monetary Fund (IMF) sounding alarm bells on Kenya’s borrowing amidst growing revenue deficit.

david nganga