How Kenya lost billions: Wanjigi links debt crisis to 2014 law change

Safina Party leader Jimi Wanjigi has asserted that Kenya's escalating debt crisis may involve billions of shillings borrowed illegally, potentially stemming from a 2014 amendment to the Public Finance Management Act.

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The real issue is not debt-to-GDP ratios. The question is how much of our revenue is going towards debt repayment.

During an interview with The Standard, Wanjigi proposed that canceling debts incurred outside the country's constitutional framework could save taxpayers approximately Sh2.8 trillion. He stated that Kenya's public debt has reached about Sh12.8 trillion, with Sh7.07 trillion in domestic debt and Sh5.76 trillion in external obligations, resulting in a debt-to-GDP ratio of roughly 69.5%.

Wanjigi criticized President William Ruto's administration, arguing that a significant portion of tax revenue, reportedly 91 percent, is allocated to debt servicing. This leaves insufficient funds for development projects and essential public services. He contended that borrowing to cover recurrent expenditures is illegal and unsustainable.

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When most of your revenue is going towards debt, you end up borrowing again to fund government operations. That is not sustainable.

The presidential aspirant emphasized the need for a thorough audit to determine the legality of borrowed funds and their utilization. He believes that identifying and canceling illegally acquired debts is the solution, dismissing concerns that this would constitute defaulting. Wanjigi traced the origin of Kenya's debt crisis to a 2014 amendment that he claims weakened constitutional safeguards on public borrowing by exempting loan proceeds from the Consolidated Fund, thereby reducing parliamentary oversight.

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The question is simple. If debt was borrowed, where did it go and what development did it finance?