World Bank has cautioned that Kenya's continued borrowing to fund the Big Four Agenda will overstretch the country's financial strength.
Urging the government to look at the long term effect on the economy, the World Bank's chief economist based in Nairobi Pinelopi Koujianou Goldberg challenged the government to consider the sustainability of these projects.
“It may be better to slow down, perhaps cut back on borrowing, and financing big projects. Take more of a long-term perspective and make sure that the way these projects are financed is truly sustainable,” Goldberg told Bloomberg.
It is believed that the effort to accomplish President Uhuru legacy projects has forced the national treasury to increase spending, a move that has impacted heavily on borrowing to sustain the projects since the treasury was unable to increase its revenue.
World Bank projects that Kenya debt is likely to skyrocket by 11% up to 6.45 trillion by June.
Goldberg projects that this will affect its sustainability, even as the government races against time to deliver thousands of affordable houses, improve health care and farming input, manufacturing industries and increase electricity production capacity by 2022.
This means the government will have eaten much into the country's finances.
In addition, the government's inability to exercise austerity measures and save the money for the projects forced it to trigger additional borrowing by amending its borrowing ceiling to meet its economy.
Not to mention the budget gap that treasury faced amidst alarm by the Central Bank governor, Patrick Njoroge that the country could not afford to increase its debt through lending.
"Funding the ‘Big Four’ projects within five years of an electoral term may put pressure on government borrowing and ultimately impede growth," Goldberg warned.