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Vol 59 No 18

Published 14th September 2018


Fuelling a debt crisis

Deadlock over plans to raise fuel taxes to satisfy the IMF risks derailing the President’s economic plans

Kenya's debt burden has been growing rapidly for the past four years, rising from 45% of GDP to near 60% now. Solid growth rates have given leaders freedom to ignore the warnings of fiscal hawks up to now and the government still shows little sign that it is ready to rein in spending. It has run up a fiscal deficit worth 10% of GDP, while debt and debt servicing costs have surged, largely as a result of the US$4 billion Chinese loan for the Mombasa-Nairobi standard-gauge railway. Budget giveaways in the run-up to the 2017 elections did not help, and neither did many businesses delaying investments until the dust had settled after the hotly disputed poll.

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