Mbadi Scoffs at Nyoro’s Debt Warning, Defends Treasury Amid Default Fears » Capital News
NAIROBI, Kenya, Apr 17 – Treasury Cabinet Secretary John Mbadi has dismissed dire warnings from Kiharu Member of Parliament Ndindi Nyoro over public debt crisis, urging lawmakers to focus on liquidity management rather than stoking fears of a looming default.
Speaking on the floor of the house on delayed NG-CDF disbursements, Mbadi downplayed claims that Kenya was on the brink of default, instead urging a united approach to navigate what he termed ‘temporary fiscal pressures.’
“The problem with debt sustainability the numbers are there, the figures are there. Even the IMF has the figures, the World Bank has the figures, and we have been rated out there,” Mbadi stated.
“The problem we have is about liquidity. Loans were taken at a particular point in time, and most of them are maturing between now and 2032. That is why we have the pressure,” he explained.
Mbadi’s response came just hours after Nyoro warned that Kenya was inching dangerously close to joining the list of African countries unable to service their debt, adding that ongoing restructuring talks including a planned presidential trip to China were signals of fiscal distress.
But Mbadi asserted that after 2032, the debt burden would ease significantly as the liquidity issues will be sorted.
“From 2034 to 2048, we don’t have any loan to pay. There is no external loan to pay around that time whether bilateral, commercial, or multilateral we don’t have much loans,” he said.
Nyoro accused the government of pushing the economy toward collapse through aggressive borrowing and taxation, Mbadi argued that the administration was taking responsible steps to stabilize the country.
“This House has a responsibility, Treasury has a responsibility, the Executive has a responsibility. We must work together to steady our economy. And that is why some of us were taken to the Executive as experts to make sure that we steer this ship,” Mbadi said.
Mbadi maintained that the country is strongest economically in the region. Downplaying the claims that the country is going to default on the loan obligations.
He pointed to ongoing government obligations being met without disruption, including the payment of salaries, capitation to schools, and funds to security operations.
“Have we failed to pay salaries? No. Have we failed to pay capitation to schools? We paid in full. Are we not meeting our expenditures for security and other matters? Yes,” he stated.
Mbadi also acknowledged the growing frustration among MPs over delayed disbursements but assured the House that efforts were being made to stabilize the cash flow.
“We have released the Sh7 billion [for CDF], and I want to try and release another Sh7 billion before schools open at the end of this month, so that you sort out the bursary and make sure that the balance is not carried over to 2025/2026,” he said.
Nyoro who has previously chaired the Budget and Appropriations Committee chair, once a staunch ally of President William Ruto, has recently become a critic of the administration, particularly over its handling of public finances.
The Kiharu MP pointed to rising debt servicing costs nearly Ksh1 trillion in the upcoming financial year and warned that the country’s fiscal space was shrinking rapidly.
“Increasing taxes to get more revenue is a fallacy. You end up distorting economic decisions. People stop spending and investing and that means even the little revenue you hoped to raise never materializes,” Nyoro stated.