Kenya is heading towards a debt trap and very soon it will be rummaging through the little peanuts earned by the average Kenyan.Currently the total debt is 65% of the total GDP which is way above the recommended below 40% for developing countries.
Bankruptcy will no longer be a folk tale if the insatiable appetite for borrowing continues to grow.The strained economy is too thin to cushion the ever growing burden and borrowing to pay a debt is not healing the economic wound but only postponing the inevitable.
With the debt burden being more than half of the revenue that the country generates it spells doom especially during pandemics such as it was witnessed as the government borrowed even more to facilitate the so called cushioning the economy which is yet to yield any visible fruits.
What are some of the scenarios that may be witnessed or are already happening due to the debt crisis.
If you are a tax payer the burden will be even heavier for you because as of now every Kenyan has at least a debt of 100,000 Kenyan shillings to pay to pay off the 8 trillion debt.Taxes will be hefty and a financial killer for many.
2.Increased creditor interest rates.
Borrowing which is a safety coupon in times of emergency will be expensive as the creditor will charge more guided by the country's debt compliance.This would mean reduced foreign investments that have a potential chance of rescuing the crucified economy and creating more jobs.
3.Other payment terms.
Countries indebted to creditors have had to painfully give a portion of their country to settle or postpone payment.Sri Lanka surrendered a port to China after defaulting on its payment.
The debt conversation is a sore eye considering the fragile state of the economy.As a Kenyan you should be concerned and seek to get information on the crisis to better prepare for solutions collectively to prevent crippling our vision 2030.
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