NAIROBI: The government means well for Kenya despite sharp criticism it has received for issuing the Eurobond, Deputy President William Ruto has said. He assured that stability in skyrocketing interest rates will be achieved in a month’s time.
Ruto dismissed claims that the government has mismanaged Eurobond proceeds, saying the State opted for the bond to cushion Kenyans from the rise in interest rates caused by local borrowing. He criticised the Opposition for “thriving on lies and relying on fictitious figures” to portray the Jubilee administration as a failed government.
Opposition leader Raila Odinga last weekend said Eurobond was part of what he described as a looting spree by State officials, claiming the government has diverted its proceeds to personal accounts.
But Ruto maintained the government is “on top of this game”, adding that interest rates will begin to go down from next week and in another one month things will go back to normal. He said the government’s strategy for the Eurobond worked well, especially given the timing that it went for it.
In an interview with K24 TV on Monday night, the DP dismissed claims, by Cord leader that the government has been over-borrowing and spending beyond its means, terming it “the biggest fallacy that has ever been said”. “Many people say the economy has not been in the situation we are in since Kanu days.
In 2011, we had a worse situation than we have today and the US dollar rose to 107. Inflation was at 19.7 per cent unlike now when is at 5.9 per cent… The Central Bank (of Kenya) rate was at 18 percent but right now it is at 11.5 percent,” said Ruto. “Those shouting about the situation today were in the Grand Coalition.
It took six months to rectify the situation but this one is going to take less than a month,” he added. On Eurobond, Ruto siad Kenya’s timing was perfect and that the government it got the best deal in the market.
“It is unthinkable that any intelligent person can think that the government can raise money outside through a sovereign bond and then spend it in a cagey manner…You really need to be coming from another planet,” said the DP.
Asked what impact the bond had to the country’s economy, Ruto said it reduced borrowing rates by government from 11 per cent to 8.3 per cent. “When we took the Eurobond, the lending rates decreased and some of the money was also used to pay debts which were taken by the Coalition government, it’s far-fetched to now claim that we are trading with the money,” he said.
“It is good for us to explain to Kenyans. The reasons for which we looked for the Eurobond were perfect and we managed to achieve and do what we wanted to do. We raised sufficient money for infrastructure and Treasury Cabinet secretary Henry Rotich has given a clear indication of how that money was spent.”
He said the US economy has strengthened which means the interest rates in the US economy have gone up and all currencies worldwide have depreciated compared with the US dollar.
