Most people don’t actually understand what debt-to-GDP means. They just repeat whatever politicians say. Meanwhile, they’re happy to enjoy the roads and hospitals that debt paid for.
The issue isn’t just borrowing… it’s about whether the borrowed money actually leads to economic growth. If it doesn’t, we’re just digging a hole.
Debt isn’t bad by itself… what matters is how you use it.
Thorn said:
Debt isn’t bad by itself… what matters is how you use it.
Exactly. Same as personal finance… debt can help you, or it can bury you.
Kenya’s debt-to-GDP ratio has doubled in the last 10 years, even though the economy has grown. That’s a red flag. Either we raise taxes, or we shrink the government. Either way, someone has to pay.
Teo said:
Kenya’s debt-to-GDP ratio has doubled in the last 10 years, even though the economy has grown. That’s a red flag. Either we raise taxes, or we shrink the government. Either way, someone has to pay.
We don’t actually need to ‘pay off’ the debt. Every growing economy takes on more debt. The real question is whether we can keep interest rates low.
Kenya’s economy has been stuck in a cycle of low wages, low spending, and low investment. The only way out is to inject more money into people’s hands.
Tully said:
Kenya’s economy has been stuck in a cycle of low wages, low spending, and low investment. The only way out is to inject more money into people’s hands.
That’s an option, but wouldn’t that just lead to inflation?
Debt itself isn’t the issue… the problem is that we keep borrowing, but we’re not growing fast enough to afford it. Investors won’t touch a place where the risk is high.
Thorne said:
Debt itself isn’t the issue… the problem is that we keep borrowing, but we’re not growing fast enough to afford it. Investors won’t touch a place where the risk is high.
I actually think Kenya is on a lot of investors’ radar. I know people looking to put money here once conditions improve.