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Raila raises concerns over govt's suspicious borrowing spree of Sh213B

Raila Odinga raised concern over the borrowing of Sh213 billion just days to the end of the financial year

Azimio la Umoja leader Raila Odinga speaking at Toi Market on June 14, 2023

The Azimio Coalition led by opposition leader Raila Odinga, has called for transparency and accountability from the Kenya Kwanza administration following a series of suspicious borrowing activities.

In a press release issued on Tuesday, June 20, Odinga highlighted several alarming features surrounding recent borrowing undertaken by the government, which occurred just days before the start of the new financial year.

He said that the Kenya Kwanza administration secured a staggering Sh213.4 billion from local financial institutions in a single day last week.

The Azimio leader said the timing of the borrowing is questionable, taking place a mere ten days before the commencement of the new fiscal year, set to begin on July 1, 2023.

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Moreover, the borrowed funds were obtained at an exceptionally high interest rate of 15.84 percent.

Additionally, this single borrowing constitutes almost half of the total approved annual domestic borrowing of Sh438 billion for the year 2022-2023.

The Azimio Coalition Party has requested the Kenya Kwanza administration to provide clarification on several key concerns.

Firstly, the party demanded a detailed account of where the borrowed funds will be allocated, given the proximity to the new financial year.

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Furthermore, the party questioned the necessity of such massive borrowing, merely days before the conclusion of the previous financial year and the subsequent beginning of a new one. The opposition leader raises doubts about the government's ability to absorb Ksh213.4 billion within such a short timeframe.

Odinga urged the administration to address the potential consequences of this sudden influx of borrowed funds on the overall financial stability of the country.

The Azimio leader argued that with the government securing loans at a staggering 16 percent interest rate, small businesses and individuals could face interest rates of 24 percent or more.

The opposition leader questioned whether the Kenya Kwanza administration comprehends the implications of such reckless borrowing and its impact on businesses and ordinary citizens.

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Finally, Odinga expressed his conviction that despite Kenya's substantial debt burden, the Kenya Kwanza administration continues to borrow money at extraordinarily high interest rates.

He suggested that these funds may be utilized to settle questionable pending bills owed to politically connected contractors, potentially involving illicit activities such as bribery.

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