The World Bank (WB) has sent a warning to President Uhuru Kenyatta's Jubilee Government for using money borrowed on recurrent expenditure instead of funding development projects.
The Bank disclosed that money borrowed by the government was used on wages and purchase of goods and services other than on development projects.
In a report highlighting the state of the Kenyan economy, the global lender stated that the Government had failed to follow legal procedures noting that the debt accrued should only have been used for financing investments.
"This is a departure from the fiscal responsibility principles set out in the Public Finance Management (PFM) Act ," stated WB.
This came just a few days after the President assured Kenyans that the Sh4 Trillion debt incurred by Jubilee had been invested in development projects across the country.
Kenyatta defended his borrowing stating that government used the money to invest in rail, roads, water, and health which would boost economic growth.
“The money is not going towards payment of salaries or consumption but to projects that will spur economic growth and create employment,” the President indicated.
Recent data from the Central Bank of Kenya (CBK) revealed that President Kenyatta's regime had raised the country's debt with over Sh2 Trillion.
