Lobby wants CBK stripped of power to manage public debt
A consortium of Lobby groups in the country is now calling for the formation of the National Treasury Management Agency to check on how the government is appropriating public resources.
The Coalition of Civil Society Organisations (CSOs) under the umbrella of Okoa Uchumi has faulted the current system where Central Bank of Kenya (CBK) has the mandate to regulate and manage debt at the same time. Wanjiru Gikonyo, the National Coordinator for The Institute for Social Accountability (TISA) said that there is need for an independent body whose main focus will be to tame government expenditure and appetite for foreign loans.
She noted that in the current setting, Eurobond and syndicated loans are responsible for driving the cost of living in the country. “In the Okoa Uchumi Campaign, we are putting together a manifesto to push for political accountability and bolstering constitutional safeguards in public debt management to achieve debt sustainability,” said Gikonyo.
The fresh push to have an independent body managing debt in the country comes in the backdrop of increased foreign debt in the country which grew by 23.4 per cent between 2013 and 2020.
Figures from Treasury show that at least Sh77 out of Sh100 of gross domestic product (GDP) is in debt. The data from Kenya’s debt registry as of the end of last year further revealed that gross public debt crossed the Sh8 trillion mark to stand at Sh8.2 trillion against the country’s nominal GDP estimated at Sh10.7 trillion.
This means for every Sh10 earned from the sale of goods and services in the country, Sh7 covers loans, illustrating Kenya’s high level of indebtedness which is likely to worsen on growing volatilities in the global market.