How Ruto Borrowed Ksh213B In 24 Hours, Used It In One Week- Raila

Azimio la Umoja leader, Raila Odinga, on Tuesday, June 20 demanded President William Ruto to explain how his government borrowed Ksh213.4 billion in the space of a day just a week before the beginning of the 2023/24 Financial Year.

Raila in a statement challenged the Kenya Kwanza administration to explain the new debt having raised issues with what he termed as “suspicious” borrowing.

Odinga wondered about the source of the large internal debt, its timeliness in regard to the passing of the controversial Finance Bill 2023 and its abnormally high-interest rate of about 16 per cent, a figure he claimed was higher than the amount borrowed in the previous four months altogether.

He believed that the borrowing was done low-key and that the government was yet to explain how the amount will be used.

"With the ongoing focus on the Finance Bill providing a perfect cover, the Kenya Kwanza administration has in recent days engaged in a suspicious spree of borrowing which the Azimio Coalition Party demands clarity on.

"In a single day last week, the Kenya Kwanza administration borrowed Ksh213.4 billion from local financial institutions. This debt has a number of curious and disturbing features," he claimed.

Raila alleged that the borrowing had taken place 10 days before the start of Kenya Kwanza’s inaugural Financial Year, which begins on July 1, 2023, and that the amount was borrowed at an interest rate of 15.84 per cent, exposing the country to an additional burden of servicing an unnecessary loan.

"Thirdly, this single borrowing is almost half the total approved annual domestic borrowing of Ksh438 billion for the year 2022-2023. 

"Last week’s borrowing of Ksh213.4 billion came despite the fact that the regime has been borrowing all year. In light of this weird move by Kenya Kwanza, Azimio La Umoja would like the administration to provide clarity on the following concerns," he went on.

Raila demanded President Ruto to reveal to Kenyans the full account of where the funds are going, a week prior to the start of the new financial year, warning that any misuse of the funds could do serious damage towards the economy.

"Why such a massive borrowing just about a week to the end of the old financial year and the beginning of a new one? Can the regime consume Ksh213.4 billion in one week? What is the impact of this single borrowing on market liquidity? 

"Why is the regime deliberately locking out the private sector from the credit market? The government having borrowed at 16 per cent, the private sector, including small businesses will end up paying very high-interest rates of 24 per cent or more on their loans. Does the administration understand or care about the impact of this reckless borrowing at extremely high rates, on businesses and individual Kenyans?" he wondered.

The former Prime Minister also compelled the Head of State to explain the law the Kenya Kwanza regime used to change the size of a Ksh60 billion bond mid-stream, noting that the regime announced a prospectus of the said bond.

"Can Kenya Kwanza point out the infrastructure projects that will be financed by the bond proceeds in one week?

"Azimio is convinced that despite the country being deep in debt, the Kenya Kwanza administration is continuing to borrow money at extremely high rates to pay questionable pending bills owed to politically correct contractors, without following the law,  in return for bribes," he went on.

Raila went on to serve notice to the National Treasury and all ministries involved in the borrowing, that it will reach a point where they will have to account for their alleged misdeeds, warning that some government officials may bear individual responsibility.

The government was yet to respond to Raila Odinga's accusations, coming after Treasury Cabinet Secretary Njuguna Ndung'u on Wednesday, June 14 indicated that the borrowing was necessary to meet the country's financial obligations.

Ruto has been on record speaking out against borrowing, especially to meet government expenditure, noting that he would harness revenue locally to drive his agenda and not take the country to the cliff through more borrowing.