God loves Ruto’s government; CS Mbadi
Cabinet Secretary John Mbadi has defended the government’s handling of Kenya’s public debt, saying timely decisions helped the country
Treasury Cabinet Secretary John Mbadi has defended the government’s handling of Kenya’s public debt, saying timely decisions helped the country avoid a potentially devastating sovereign default.
Speaking on Saturday, Mbadi said the government benefited from unexpected market conditions that allowed it to refinance maturing obligations.
“Fortunately for this government, and I say, God loves this government, hata kama unasema wantam, hiyo ni yako, hiyo ni ya shetani, Mungu anapenda hii serikali, we will have two terms, and I will tell you why,” Mbadi said.
“Something no one expected happened. The market opened and this government went to the market, got another Eurobond and refinanced the other Eurobond,” he said.
Mbadi described the development as good fortune rather than exceptional economic skill. “It was luck. It was not any economic magic for Kenya,” he said.
However, he stressed that the government moved quickly to ensure the opportunity did not expose the country to future risks.
He said the Treasury opted to deal with upcoming Eurobond repayments earlier than required.
“That is why last year in February and March, because we were aware another Eurobond was coming up for payment for May 2027, we decided to deal with it earlier, and we managed,” Mbadi said. He added that a similar decision was made later in the year.
“In September again we dealt with 2028. We didn’t want to behave like the other government which decided to leave the rest.”
Mbadi said Kenya had been flagged by the International Monetary Fund as being at high risk of default. “IMF categorised Kenya among five other countries in Africa which were going into default. All those countries have defaulted. It is only Kenya which has not defaulted,” he said.
Plane with 11 people vanishes in a mountainous region
Man dies after beating by military officer in Umoja
Yoweri Museveni wins 7th term as Uganda President
Governor Kahiga dodges challenge to declare ‘Tutam’ in front of Ruto
He warned that a sovereign debt default would have had serious consequences for the country and its workers. “You people don’t know what a sovereign debt default means,” Mbadi said. “If a country defaults in paying debt, all public servants must take salary cuts.”
He explained that any bailout from international lenders would have come with painful conditions.
“For us to be bailed out by IMF and World Bank, they will come and tell us, you have found yourself in a mess, we have to clean you,” he said. “To clean you, you start with yourself. Everybody 50 per cent pay cut. You must rationalise. Some staff must go home.”
Mbadi said Kenya narrowly avoided that scenario.
“I am giving you what probably would have happened to Kenya if we defaulted. It was terrible,” he said. “We were in a bad situation but we have come out of that problem. Even IMF have said we escaped.”
He blamed the debt pressure on a lack of preparation by the previous administration. Mbadi said that by early 2024, Kenya faced a major repayment with no clear plan in place.
“Before we reached 2024 February, a Eurobond was coming up for payment of Sh260 billion in June, and there was no plan in place because the government that was there knew they were leaving so they didn’t care,” he said.
Mbadi maintained that early intervention and decisive action shielded the country from deeper economic pain.
President Ruto eyes doubling his 2022 votes in 2027
State House, DP’s office spent over Ksh7 billion in six months, Treasury reveals
Atwoli re-elected as Secretary General for 5 years
Broad-Based Government hasn’t snatched from Mt Kenya what is theirs – President Ruto
Follow us
