Nyakera Underscores Private Sector Contribution to GDP

The private sector in Kenya plays a fundamental role in the economy. It contributes 80% of GDP, provides 70% of total employment and is the key source of the country’s export.

It is therefore very sad to see how it is being affected by the accumulation of pending bills from government.

In fact, the pending bills have single handedly led to decreased liquidity, increased bankruptcy and auctions, and a decline in profits which has in turn led to closure of many corporates.

To address the issue of pending bills which have now reached KES 650 BILLION, the government should consider working with top local banks to directly pay the individuals and corporates owed less than KES 10mn.

The program would see government indirectly owe the banks without making any additional borrowing hence not offending any clauses within current loan agreements.

It would also present the government the opportunity to raise immediate taxes from these pending bills. ALSO, most of those owed would be willing to take a haircut and get paid immediately, presenting an additional opportunity for the government to save more money while injecting liquidity to the struggling economy.

All in all, the Government MUST do everything possible to guarantee the survival of the private sector in the face of pending bills.

Hon. Irungu Nyakera is the National Chairperson of Farmers Party of Kenya.