On Madaraka Day, President Uhuru Kenyatta delivered his final national address, leaving behind a legacy of debt-fueled development. In his speech, he emphasized the importance of debt in bridging Kenya's infrastructure gap and connecting its markets.
According to Kenyatta, the Jubilee administration's decision to borrow more has been worthwhile, with tangible dividends in the form of improved infrastructure. He cited the Standard Gauge Railway (SGR) project as a prime example, which has increased cargo and passenger transportation while reducing costs.
However, Kenyatta's remarks come as the National Treasury proposes an increase in the debt ceiling from Sh9 trillion to Sh10 trillion to finance the 2022/23 budget. As of December 2021, Kenya's public and publicly guaranteed debt stood at Ksh8.02 trillion (USD 70.97 billion), with a significant portion allocated to infrastructure projects like the SGR.
The 578.8km SGR project from Mombasa to Naivasha was built at a cost of Ksh 477 billion, making it the single largest project in Kenya's history. While Kenyatta defended the project's value, critics argue that the contracts and agreements related to its construction and operation remain opaque.
As Kenya's next administration prepares to take the reins, Kenyatta's words of caution on debt usage will be closely watched. Will they continue to rely on debt to drive development, or will they adopt a more cautious approach?
