IMF reveals Kenya debt could be more than Sh6.2 trillion

id : 81 Tax Policy   
posted by : Admin
 DOQ : 2020-03-12 02:29:53

Former National Treasury Cabinet Secretary Henry Rotich is once again on the spotlight, after the International Monetary Fund (IMF) accused his team of using technicalities to conceal the true position of the country’s debt.
Falling short of accusing the Treasury mandarins of cooking numbers, IMF called out the Exchequer for blindfolding the public by using different debt-ceilings when calculating the sustainability of the country’s debt.
The muddling up of debt figures has left Kenyans confused on the true financial position of the country. This means that it is not possible to tell whether Kenya is able to meet all its debt obligations.

“While the 2015 Legal Notice sets a maximum debt level of 50 per cent of GDP in NPV (net present value) terms, budget documents instead assess debt to be sustainable — and therefore acceptable — if it is less than 70 per cent of GDP in NPV terms,” reads IMF’s fiscal transparency report released this week.
The law has since been changed, and the ceiling for public debt shifted from being pegged on the national output, Gross Domestic Product (GDP), to a nominal ceiling of Sh9 trillion. IMF joins Central Bank of Kenya (CBK) Governor Patrick Njoroge in accusing former Treasury CS, together with his Principal Secretary Kamau Thugge, of distorting revenue figures.

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