Professor Ogola claims government is borrowing billions from local markets

By Robert Mutasi

Governance and political expert Professor Fredrick Ogola has claimed that the government does borrow 20 billion Kenya Shillings every week from the local market.

The money intends to raise capital so that the government can run and execute its duties effectively.

In an interview with NTV, Ogola said the borrowing from the local markets will affect the business of small business people from growing.

Again, Ogola claimed that the majority of the local business people will experience shortage of capital to continue and also expand their business.

"The government is borrowing 20 billion Kenyan Shillings every Thursday from the local market so that they are competing with the Kenyans for that source of capital so that will become terrible," claimed Professor Ogola.

According to Prof Ogola, traders are complaining that the context of doing business has become very difficult.

The scholar mentioned several types of costs that are affected in business due to the changes in the Finance Bill 2023.

"Trading has got three main costs, one cost of goods sold where you will buy them from they will go up, second operating cost movement fuel will be highly costly, third the cost of capital," he mentioned.

He said that the government should have looked at the state of cost of living before moving the Finance Bill to the parliament.

He argued that the proposals in the bill are going to affect mostly people in the semi-arid areas like the North Eastern part of Kenya and parts of Kerio Valley.

The political expert advised president William Ruto to consider areas that are experiencing famine and droughts since they will not afford the same way those in other regions like Nairobi will.

“I am trying to say that the government could have looked at it. If I was President I could have looked at this economy very differently because the economy of Nairobi is not the same as the economy in Mandera and Turkana,”Ogola stated.

The decision by Members of Parliament to double the Value Added Tax (VAT) rate on petroleum goods to 16 from 8 percent would have a significant impact on households and will result in an increase in gas prices of up to Sh12 per litre from July.