There have been concerns of an increasing public debt in Kenya as Kenyans raised issues concerning borrowed Loans. The concern came into scrutiny when the international monetary fund claimed that they were offering loans to Kenya to help service off the huge public debt. This was after kenyans complained about huge loans that are borrowed by the government but are not used for the intended purpose. To address this issue it's important to note that public debt is the money that the government owes to government lenders from the private investors . Kenya Government is not an exception in borrowing from the public but here are the expected impacts of the public debt crisis that we found our selves in.
(NTV review of public debt in 2019)
1. Increased taxes.
The government of Kenya will likely increase tax rates of almost every product and loans in a bid to raise more to pay off the debt. This has already been felt on fuel prices in Kenya
2. Reduced Government response to challenges.
Since the government would not want to lose more money, the challenges affecting common mwananchi will be given a second priority to be addressed later after public debt has been serviced to comfortable levels.
3. Loan interest rates increases.
If you borrowed a loan, you are likely to experience a bigger interest needed from you as the banks adjust to CBK rates. The government would want to milk more from you to pay off the public debt. Remember that government's debt is public debt that you as a citizen is required to raise a little you have to pay off.
4.Government will cut spending.
Basic spending by government would likely be cut to accumulate marginal cost of spending so that there would be money to pay off these debts.
5. High cost of living.
I put this one to be the last one because it's automatic in our system.Increase VAT payable on various products hence high prices for basic commodities. High taxes lead to low income and thus low living standards.
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