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BY DPPS/KORIR JUMA,23RD FEB 2018-The government has defended Eurobond II and the move to borrow other external loans saying the cash will go towards funding major development agenda.
Deputy president William Ruto has come out in defense of the move especially since the Eurobond II announcement has not gone down well with Kenyans. Mr Ruto on Friday said the Sh200 billion secured on Wednesday in London would be spent on development, not scandals.
The heavy loans, he said, would be used to fund the Jubilee government’s Big Four Agenda—housing, food security, manufacturing and universal health.
“Any borrowing is borrowing that is measured and that we have the capacity to pay,” he said at Kiawara in Nyeri as he commissioned the construction of Kiawara-Ngaringiro road.
“It is in the interest of the country and we remain a prudent and responsible government.”The government, he said, would continue to borrow despite criticism from the opposition.
“Jubilee will not be involved in politics that divide the country. 2022 (General Election) will only be relevant if we will have improved the livelihood of Kenyans.”
Kenya raised Sh202 billion ($2 billion) in a new sovereign bond issue that was closed on Wednesday.
The bond has been issued in two equal tranches of 10 years at a coupon of 7.25 per cent and 30 years at a coupon of 8.25 per cent.
The bond, which is being listed on the London Stock Exchange (LSE), was highly oversubscribed, attracting bids worth $14 billion (Sh1.4 trillion), which the Treasury says is an indication of confidence in the long term prospects of the Kenyan economy by international investors.
“The funds will be applied towards the government’s development initiatives and liability management. We will continue to invest in the infrastructure and capacity to roll out these programmes,” said the Treasury in a statement.
The deputy president who revisited the scandals that rocked retired President Mwai Kibaki’s administration, dismissed fears that the loans would be misappropriated.
“There are people who borrowed money just to play games with it resulting in Anglo leasing and Goldenberg government,” he said, referring to some of Kenya’s biggest scandals that threatened to bring the economy to its knees.
Members of parliament who attended the Nyeri event supported Mr Ruto, saying they would approve requests by the government to borrow more funds despite International Monetary Fund’s appeal to Parliament to rein in Kenya’s appetite for new loans.
On his part Kieni MP Kanini Kega said the National Assembly would not act as a barrier to the country’s desire to borrow money.