MUSALIA MUDAVADI WANTS MORE PRUDENCE AND TRANSPARENCY IN OUR LOANS INTAKE
By Amunga Peter.
All countries finance their budgets through taxes, grants and borrowing. All.
When economic activity is depressed as is now due to Covid, taxes that are coming in are reduced, yet expenditure has gone up to sustain the economy and respond to the pandemic.
Musalia is saying that borrowing is inevitable, but it must be done in a structured way. Developed countries like Japan, Canada etc are borrowing but with proper structures transparent and vetted by parliament.
Borrowing is also encouraged whenever the interest rate (eg on IMF loans) is lower than the GDP growth rate. This means that every shilling borrowed and invested earns more in growth than it costs. That is what the Sakwa Bunyasi public debt bill is all about. The bill sponsored by the Musalia Mudavadi ANC PARTY has already gone thro the first reading in parliament, been accepted by the finance committee and TREASURY.
The concern we as KENYANS should not have is not on borrowing per se, but on the use of the funds generated from taxes or loans, which is a totally different conversation. That is the conversation Musalia Mudavadi is pushing.