Debt Or Theft?: Francis Gaitho Shares Perspective On Kenya's Economic Crisis

• Political commentator Francis Gaitho attributed Kenya’s economic decline to corruption and resource mismanagement under Ruto’s leadership
• However, the government has blamed the economic situation on the rise in the dollar value and the fall of the Kenyan shilling
• Gaitho criticised the government’s claim of a debt crisis, arguing that it’s an artificial crisis rebranded as debt

Didacus Malowa, a journalist at TUKO.co.ke, brings over three years of experience covering politics and current affairs in Kenya.

Nairobi - President William Ruto has failed to address critical issues he promised to deal with while campaigning ahead of the 2022 General Election.

One of the most popular pledges he made was an assurance that immediately after he was sworn in as president, the price of unga would drop to affordable levels.

"Nikiweka biblia chini hivi bei ya unga inaanguka (once I put the bible down, the price of unga will drop significantly)," said the president during the campaign trail.

Shockingly, prices of nearly all basic commodities, including unga and fuel, have skyrocketed since Ruto came to power.

Is Kenya's debt a fallacy?

Political commentator Francis Gaitho attributed the deteriorating economic situation under Ruto's leadership to corruption and mismanagement of resources meant to provide services.

He argued that the debt burden, which has to a large extent, contributed to the mess the country is in today, is a "fallacy" being used to fleece Kenyans.

"We are bending over backwards to comply with the loans that we are borrowing clearly for corruption and also for recurrent expenditure. These loans are not attached to any project. We cannot see where they are going. We cannot see any new project that has been launched by this government. We cannot see any," argued Gaitho.

Controversial Finance bill

He called out the Members of Parliament for failing on their mandate to provide oversight by scrutinising Kenya's debt situation in detail and taming the executive's penchant for expensive loans from the World Bank and International Monetary Fund (IMF).

"All our problems are self-induced and are caused by the political establishment. The MPs are the ones who passed the Finance Bill, giving the carte blanche to William Ruto and the World Bank and the IMF to subject is to punitive taxes," said the political commentator, who is also eyeing a parliamentary seat in Kiambu county.

The Kenya Kwanza government has blamed the prevailing tough economic situation on 'reckless borrowing' by the former regime led by retired President Uhuru Kenyatta.

Dollar crisis in Kenya

The government has also attributed the difficult situation Kenya finds herself in to the rise in value of the dollar resulting in the fall of the Kenyan shilling to an all-time low.

This, according to the government, has caused inflation and made it extremely expensive for Kenya to import commodities such as fuel, wheat and so forth.

As a result of the weakening shilling, the Treasury has projected interest payments in the financial year ending June 2024 to rise to KSh 918.9 billion from KSh 687.3 billion, representing 33.7%.

"The increased interest payments are due to the weakening of the Kenya shilling and elevated interest rates in the domestic environment," Treasury CS Njuguna Ndung'u said.

Government-to-government oil deal

Kenya has been grappling with the dollar shortage for the better part of the year, and the government was forced to enter a G-to-G oil importation deal with the Dubai and Saudi Arabia governments to ease pressure on the dollar.

However, the opposition has criticised the deal terming it opaque and "a ploy to steal" from Kenyans.

"The Supplier Purchase Agreement between the Middle East Oil firms and their hand-picked distributors in Kenya has never been seen. We challenge Ruto to publish this document. The open tender system was efficient, accountable and competitive and offered prices commensurate with the international pricing model," Raila said.

Artificial debt

Gaitho rubbished the government's position that the debt crisis has made the economy shrink, arguing the crisis is artificial.

"We have borrowed so much because part of our crisis comes from this idealisation of something called debt. But in my opinion, I think it is theft which has been rebranded as debt," he opined.

He also took issues with the president's advisors, led by chief economist David Ndii.

According to him, the advisory council has been playing and dancing to the president's favourite tunes instead of painting him a clear picture of where the country is headed economically.

"The advisory unit around the president is a "fallacy". They are there to compliment, to be the praise singers. They are there to ensure that whatever has been decided behind closed doors is sold to the public. So they are going to use various means. They are going to do trends on X (Twitter) to promote it," claimed Gaitho.

Treasury CS Njuguna Ndung'u admits gov't is broke

Elsewhere, Treasury Cabinet Secretary Njuguna Ndung'u appeared before the National Assembly's Finance Committee.

He disclosed to the committee that the country was facing liquidity challenges that have affected cash flow across the government.

The Treasury CS said President William Ruto's administration was having difficulties meeting some financial obligations, such as payment of salaries.