Sunday, April 9, 2023 – President William Ruto’s economic advisor, David Ndii, has given the strongest indication that the government is broke.
This follows the salary delays which have affected public service and key institutions.
While responding to a series of concerns, Ndii indicated that Ruto’s administration was in a fix on whether to pay the debt or suffer the consequences of defaulting.
Explaining the fix, the economists revealed that the government directed almost 60 per cent of the revenue collected to service debts.
Less than 40 per cent of the collected revenue was reserved for paying salaries and supporting other government expenditures.
Ndii further implied that cash resources were short in supply, whereas the demand was high from various sectors, including public servants.
Following the dilemma, Ndii asked whether Ruto should pay the loans or salaries.
“Is public finance that difficult? It’s reported every other day debt service is consuming 60 per cent plus of revenue. Liquidity crunches come with the territory. When maturities bunch up, or revenue falls short, or markets shift, something has to give. Salaries or default? Take your pick,” Ndii posed.
“Foreign debt is not the issue. I’m talking about weekly maturities of domestic debt held by your banks and pension funds (80 per cent plus of debt service),” he further clarified.
However, Ndii revealed that Ruto approached him following his projection that Kenya would run broke due to debts, in 2014.
After winning the presidential election, he brought him to help his administration solve the cash crunch issue.
Just the other day, Ruto’s government gave Ndii more than Sh200 million to buy cars and settle in his new office only for him to start issuing ultimatums.
The Kenyan DAILY POST