The government should explore other avenues of raising cash to finance projects and avoid external borrowing that has reached 60 percent of the Gross Domestic Product.
An exclusive interview with KBC Channel One, Central bank governor Dr. Patrick Njoroge says high debt costs and repayment risks pose a big challenge.
Kenya’s total public debt hit 5.95 trillion shillings comprising 3 trillion shillings from international lenders and 2.95 trillion shillings in domestic borrowing.
There have been concerns that the debt levels are high and Kenya could face challenges in servicing the loans. Central bank governor Dr. Patrick Njoroge has also added his voice to this debate.
Dr. Njoroge said other revenue raising avenues could be explored to finance government operations to help check the public debt.
In June, the government announced a demonetization process that involves replacing old notes with new ones in compliance with a constitutional requirement that bars the use of portraits or images of individuals on currencies.
The central bank governor says Kenyans should take advantage of the remaining 26 days to exchange their old 1,000 shillings notes with new ones since the end month deadline will not be extended.
Analysts say the demonetization process is being used to fight illicit financial flows and corruption.