Brace for tough times ahead; China’s loans are killing us - UHURU/ RUTO tell Kenyans as they regret going for cheap loans

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Tuesday August 21, 2018 - The Jubilee Government under the leadership of President Uhuru Kenyatta and his Deputy, William Ruto, has warned Kenyans to prepare for tougher times ahead as it struggles to repay the loans owed to China. 

In a statement to Kenyans, Treasury says that it will have to squeeze more taxes and therefore they should be ready for inflationary pressure and fight bankruptcy.

This comes as the Government prepares to plug the gulf left by heavy borrowing particularly from China which now accounts for up to 65 per cent of bilateral loans.

“The overall increase in public debt is attributed to increase in external loan disbursements and also increase in the uptake of domestic debt during the period,” read the statement in the Quarterly Economic and Budgetary Review for the 2017/2018 Financial Year.

Kenyatta University chairman of Economics department, Dr Paul Gachanja, however believes that the debt burden is a necessary evil.

He says that Kenya must tighten its belt to secure a better future for its growing population.

“Any serious Government will obviously invest in the future generations and such projects are very important.”

“It is however on the prudence with which these funds are utilised that will determine whether we see value for money in the long run.”

“Mismanagement is our biggest setback,” Dr. Gachanja said.

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