‘Diaspora Can Build A New Airport’ – Mudavadi Says As Gov’t Targets Ksh 300B
Musalia Mudavadi, Prime Cabinet Secretary, has recommended that the diaspora community help finance the development of a new terminal at Jomo Kenyatta International Airport (JKIA).
According to the Foreign Affairs Cabinet Secretary, the government could consider issuing a diaspora infrastructure bond to modernize the JKIA.
Following the suspension of talks with the Adani Group due to protests, the Head of State stated on Tuesday that the government will find a method to enhance the airport.
According to Treasury Permanent Secretary Chris Kiptoo, the government will need to spend around Ksh260 billion to renovate the outdated airport.
However, Mudavadi now claims that Kenyans living overseas can pay for the upgrades on their own.
Kenya is primed to harness the power of its diaspora through a dedicated Diaspora Bond a game-changer that could fund monumental projects and transformative infrastructural initiatives.
— Musalia W Mudavadi (@MusaliaMudavadi) December 4, 2024
Speaking during Diaspora Day at KICC, I highlighted an impressive milestone: in just the… pic.twitter.com/ahExK8faz4
Since Ruto announced the suspension of the Adani Group-led attempts to upgrade JKIA under a PPP project last month, the government has been hit by tailwinds.
Mudavadi said during Diaspora Day 2024 at the Kenyatta International Conventions Centre (KICC) on Wednesday that government studies indicated that an infrastructure bond might raise up to Ksh500 billion.
“If we package an infrastructure diaspora bond properly, well backed…the bond can raise more than the Ksh300 billion required,” he asserted.
He added, “Our initial figures show we could raise over Ksh500 billion. That means the diaspora can build that new airport.”
An infrastructure bond is a debt security issued by the government with the specific purpose of raising funding for capital-intensive infrastructure projects.
The bond works in this way: when you purchase an infrastructure bond, you are essentially lending money to the government.
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In return, the government pays you interest on a regular basis until the bond matures, at which point the principal (the amount you invested) is returned.
In January of this year, the Central Bank of Kenya (CBK) issued an 8.5-year amortised infrastructure bond worth Ksh70 billion to fund budgeted infrastructure projects for the fiscal year 2023/24.
Despite the Adani catastrophe, the government remains adamant and insists on using public-private partnership (PPP) models to fund the country’s massive infrastructure projects.
While Mudavadi made no changes to how the bond would work, infrastructure bonds are still in high demand because they are tax-free and have low interest rates.
‘Diaspora Can Build A New Airport’ – Mudavadi Says As Gov’t Targets Ksh 300B
