Renewing Kenya: We cannot borrow our way to prosperity

Borrowing is not necessarily bad. What is bad is when a country borrows to fund non-priority development and recurrent expenditure.

Every successful nation has borrowed to finance its development. Businesses borrow to expand. Families borrow to buy homes. Governments borrow to build roads, ports, railways, power stations and other investments that generate future economic growth.

The real question is not whether a country borrows. The real question is whether it borrows wisely, whether the country borrows to grow the economy.

Kenya today finds itself trapped in a cycle where public expenditure consistently exceeds public revenue. The difference is financed through borrowing, adding to an already substantial public debt burden. As debt grows, so do interest payments, leaving less money available for healthcare, education, security, infrastructure and other essential public services.

This is not a sustainable path. No household, business or nation can indefinitely spend more than it earns. Eventually, difficult choices become unavoidable. The challenge before Kenya is not simply to reduce debt. It is to restore fiscal discipline. Fiscal discipline is often misunderstood as austerity or indiscriminate budget cuts. It is neither.

Fiscal discipline means managing public finances responsibly. It means ensuring that government spends within its means, borrows only when necessary and invests borrowed funds in projects that generate long-term economic returns.

It is, above all, about stewardship. Every shilling collected from taxpayers represents a sacrifice made by a Kenyan family or business. Government therefore has a duty to ensure that every shilling delivers the greatest possible value to the nation. Unfortunately, too much public expenditure has failed this test.

Government after government have often expanded recurrent expenditure while simultaneously borrowing to finance development. In effect our past governments have left development expenditure to be funded mostly by borrowing. This is wrong. Development is the responsibility of government and must in the first instance be funded by own resources. Public projects have sometimes been selected more for political visibility than economic value. Cost overruns, delays and corruption have further reduced the returns on public investment.