Economic analysts says the government needs to urgently renegotiate debt repayment
•As a country, are not in a safe place as far as debt is concerned.
•Remember, that when you spend money on nonproductive things like basic needs; health provision etc, you we are in trouble.
As a country, we are not in a safe place as far as debt is concerned. If you are in a situation of debt, you will have to take money out of your earnings to pay it or if worse comes to worse, you borrow more to repay the principal and the interest and then you get yourself into greater debt.
That is where we are as a country. We over borrowed.
Sometimes ago, we urgently needed another Eurobond and as soon as it was approved, a huge chunk of that Eurobond went to pay off some money that was due to the international lenders, the IMF and World Bank. So, we are actually borrowing to repay another debt. That is the sad situation, we are now in a cycle of debts.
Remember that when you spend money on nonproductive things like basic needs; health provision etc, you are in trouble.
What we need to do, in the medium term, is to look at this whole debt thing and say, right, because we going to pay it and we are not going to get much relief, let’s reschedule.
Basically, it is like you are going to a bank manager and say, I borrowed Sh50, 000 from you and I can’t pay Sh5, 000 a month. I can’t manage it. Can you please reschedule it so that I pay Sh2, 500 a month and I will repay for a longer period?
That is what should happen very quickly with a lot of these Chinese debts because we won’t manage it. We have already defaulted. So, very fast we need to renegotiate all of this debt so that we pay over a much longer period of time.
We cannot fail to pay, otherwise we shall start getting into situations that the Chinese will say we will take the port because that is the security we gave for the SGR. We don’t want to get to that route.
So, we have to renegotiate very fast and double the repayment time. Lenders will not ease off, they will still get their money. Nothing is for free. Even if we pay for a longer period of time, we don’t have a choice.
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