President William Ruto now says that Kenya's debt status is one of the biggest challenges he has faced since assuming office.
While speaking during a meeting with Jubilee leaders at State House, Nakuru on Thursday, the Head of State admitted that the country's ballooning debt was an obstacle to his development plan.
He divulged that for every Ksh10 collected by the government, Ksh7 was being used to repay debts to various financial institutions and countries.
However, he maintained that he had the intention of changing the debt-to-development ratio, despite the tough consequences that will follow.
"The only problem is debt and that is what has been the biggest headache for the last year. If for every Ksh10 collected, Ksh7 goes towards debt then there is a problem.
"The remaining Ksh3 shilling then is used to pay for salaries, pay money to county governments and develop the country. My intention is to flip it," he expressed.
On the other hand, he asserted that the best and only solution to reduce debt was through the collection of taxes, a strategy former President Mwai Kibaki excelled in.
"Kibaki came into office and we were collecting Ksh200 billion and he said that we have to go the VAT way. After that, we reached Ksh1 trillion by the time he left office.
"People only want to be clapped for when they are elected. Why? No one is elected to be clapped for. We have to change this country and those opposing us will be the first to clap for us," Ruto stated.
Kenya's current debt portfolio stands at over Ksh10 trillion with some of the biggest lenders being multinational financial institutions like the World Bank, the International Monetary Fund (IMF) and developed countries such as China.
Notably, one of the outstanding debts - the Eurobond - is set to mature in the coming months. Already, Ruto noted that the country would pay Ksh500 billion towards Eurobond between December 2023 and January.
Pressure exerted by creditors has forced the government to re-strategise its fiscal policies to increase revenue such as the increase and introduction of new tax measures.
Among them include; the 1.5 per cent Housing Levy and a 2.75 per cent health insurance salary/income deductions.
