United Democratic Alliance (UDA) presidential candidate William Ruto has interfered with President Uhuru Kenyatta’s government’s borrowing, saying the enormous appetite for credit is unjustifiable.< /p>
During a breakfast meeting with the Kenya Association of Manufacturers (KAM) at his home in Karen, Nairobi, the DP said Kenya generates Sh1.8 trillion in annual revenue achieved and there is no justification for spending Sh1 trillion on debt repayment.
Dr. Ruto also accused the Jubilee Administration of criminalizing and politicizing tax payments.
DP said the government should stop the mentality that “this is other people’s money, so we borrow something.”
“I think that’s a bit too casual. We need to stop saying we’re using other people’s money because it’s not working. We pay a trillion shillings in debt every year,” said Dr. Ruto.
“If you’re raking in 1.8 trillion Sh and paying 1 trillion every year, then you’re not in a good place any way you look at it. To deal with this debt hole, we must apply the principle that when you are in a hole, stop digging and find ways to get out.”
< p-class="align--justify">The explanation of Dr. Ruto comes after President Kenyatta defended his government’s borrowing, which is expected to reach at least Shillings 6.7 trillion by the time he leaves office.
That would justify the whole Bring the national debt portfolio to Shillings 8.59 trillion by the end of this fiscal year in June, with the President saying there is a need to fund infrastructure and accelerate economic growth.
During the Madaraka Day celebrations, the President dismissed critics, saying massive infrastructure projects across the country, fueled by debt, were boosting the economy.
But Dr Ruto said Kenya now needs to make conscious savings to wean itself off borrowing from infrastructure sources, but the return on these resources in terms of jobs and expected output is not so good,” the said DP.
He said that while Kenya’s saving is only about eight percent of gross domestic product (GDP), China’s is 55 percent, so he’s running Kenya to the Asian country to get loans.
“We have to deal with the issue of savings. We can’t keep borrowing other people’s money,” he said.
In the region, he cited Uganda as a country that has created a large pool of financial resources through savings has used it to fund its infrastructure developments.
Dr. Ruto said Uganda, with an economy almost half the size of Kenya, has the largest social security fund in East and Central Africa because it The law says 10 percent of wages go to savings, with employers matching contributions as well scale up.
This law, he explained, has resulted in Uganda creating a large pool of resources to borrow money for its infrastructure projects.
“Right now we only pay 200 Sh to the NSSF even if your salary is 500,000. I think it’s silly and we need to…rethink this whole savings space and get our savings as a percentage of GDP to a good level,” he said.
Dr. Ruto also accused his boss of dropping his big plans after the 2018 “handshake” with ODM leader Raila Odinga, “and going on a meaningless investment spree with no tangible returns,” saying his government would like to invest in areas that Can create jobs.
He cited the 4 billion Shash investment in an arms factory in Ruiru, which he claimed only resulted in the creation of 100 jobs, and if investing the same amount in Export Processing Zone companies would have created about 5,000 jobs.
“We dropped the ball in 2018. We will consciously select areas where we will invest in the future so that the resources bring returns in many facets, such as job creation and value creation, resources that we can export,” he said.
“Going forward, we need to be conscious about the areas we’re going to invest in, and they need to be areas we’re going to invest in to help us deal with the challenge of unemployment.” “
Regarding taxation, Dr. Ruto, the government has failed to create a stable tax environment where people think about what taxes to raise each fiscal cycle.
He said that Kenya collects only 3.6 percent of its GDP as Value Added Tax (VAT), which is 52 percent of the VAT collectible, while Rwanda collects 8 percent.
If elected, he pledged to create jobs, create a larger local and export market, and leverage existing infrastructure to make manufacturers’ jobs easier.
“We need to create a market for the product you make and the focus is on creating an affluent population.”
For the micro, small and medium sized businesses ( MSME) he promised to create a conducive environment and easier access by setting up an MSME fund to create credit.
“Our focus then is on creating an infrastructure that supports people at the bottom of the pyramid, creating laws that protect their activities and giving them easy access allow for credit.