Kenya’s heavy debt burden could be managed without hurting ongoing execution of the mega infrastructure projects if the government taps into the multi-billion shilling pension funds.

That was the verdict of the pension industry leaders meeting in Nairobi last week, under the auspices of an African Development Bank-backed think-tank, Making Finance Work for Africa (MFW4A).

African governments, they said, must rethink their sources of development funds and opt for those that best serve the interests of their countries in the long term.

“By keeping a consistent inflow of foreign funds for ‘development’ purposes, we are impoverishing Africa because those funds attract high interest rates, are prone to foreign currency swings and are pegged to stringent conditions,” said MFW4A co-coordinator David Ashiagbor.

Mr Ashiagbor said local investors were better positioned to understand risks and hence offer affordable and favourable risk cover.

“Think about mobile money in Kenya and what it has done for Kenyans. Its multi-billion shilling annual profits and financial inclusion. Could we have had such a success if foreigners were behind its various uses? Only Kenyans understand what is best for them and their country,” he said.

Mr Ashiagbor said the Kenyan government, for instance, should device an infrastructure bond platform for channelling the Sh900 billion pension funds towards national development through the capital markets.

Full Content: Business Daily Africa

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