Sharp Daily
No Result
View All Result
Friday, June 27, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Opinion

OPINION: Balancing Kenya’s public debt through growth-driven investments

Hezron Mwangi by Hezron Mwangi
December 18, 2024
in Opinion
Reading Time: 2 mins read

Kenya’s growing debt burden has become a critical challenge, with public debt levels now hovering around 73.0% of GDP with total public debt at KES 11,023.5 bn compared to a nominal GDP of KES 15,108.8 bn.  While fiscal consolidation, cutting spending or increasing taxes, has often been proposed, these measures alone are not sustainable. The real solution lies in stimulating economic growth, which would increase revenues and improve our capacity to service debt without compromising development.

For this to happen, our fiscal rules must be rewritten to prioritize investment in infrastructure, education, and health. Current fiscal frameworks like the perennial increment in tax rates through the annual revision of the Finance Bills focus too heavily on deficit reduction, often at the expense of long-term investments. By redirecting resources into productive sectors, the government can unlock growth opportunities that generate jobs, increase income, and expand the tax base. For example, investments in transport infrastructure and renewable energy would reduce costs for businesses and attract private capital, enhancing economic output.

The focus on growth also ensures that debt becomes more manageable over time. As the economy expands, the proportion of debt relative to GDP shrinks naturally. This approach avoids harmful austerity measures that undermine development and push more people into poverty. Instead, it creates a cycle where economic growth increases revenues, allowing for better debt repayment and more room for additional investments.

Additionally, encouraging private-sector involvement is essential. The government cannot tackle this burden alone, and creating an environment that fosters investment, innovation, and business growth will be key. Public-Private Partnerships (PPPs), for instance, can help fund infrastructure projects without putting excessive pressure on public finances.

RELATEDPOSTS

Kenya’s debt dilemma

May 2, 2025

Kenya’s public debt: Growth vs. Responsibility

April 24, 2025

The logic is clear: without growth, debt servicing will increasingly strain national budgets, forcing governments to cut spending on critical services like healthcare, education, and social protection. Growth-driven strategies, supported by flexible fiscal rules, are the only sustainable solution to this crisis.

To address Kenya’s fiscal challenges, we must shift from short-term deficit controls to long-term investments that expand productivity and economic capacity. By allowing greater fiscal flexibility and prioritizing investments in key sectors, policymakers can lay the foundation for robust, inclusive growth. This strategy will not only resolve our debt burden but also create a thriving economy that benefits all Kenyans. Growth is not just one solution—it is the only sustainable path forward.

Previous Post

John Mwendwa named CEO of Kenya Investment Authority

Next Post

Kenya Veterinary Association Urge Pause on Rushed Livestock Vaccination Campaign

Hezron Mwangi

Hezron Mwangi

Related Posts

Opinion

Unlocking the power of REITs: A path for retail investors

June 26, 2025
Opinion

How Kenyan banks can bridge the cybersecurity talent gap

June 25, 2025
Opinion

How companies can prevent administration through early intervention

June 25, 2025
Opinion

How dormant assets could be a hidden economic engine

June 25, 2025
Opinion

Rethinking lifestyle inflation: The quiet investment killer

June 25, 2025
Explainer

How Kenya can compete with global employment markets

June 24, 2025

LATEST STORIES

Competitive advantages of small businesses

June 26, 2025

Opinion: Invest in sports for national prosperity

June 26, 2025

Ethiopia’s access to Eritrean ports is a game-changer for trade

June 26, 2025

The importance of internships and mentorship for young graduates: Insights from Cytonn Young Leaders Programme

June 26, 2025

Kenya must tame stock market volatility to unlock corporate growth

June 26, 2025

Unlocking the power of REITs: A path for retail investors

June 26, 2025

Kenya’s CIS market: Q1′ 2025 shows a surge, setting the stage for future expansion.

June 26, 2025

How Kenyan banks can bridge the cybersecurity talent gap

June 25, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024