The National Treasury has confirmed that it is seeking a Sh75 billion loan from the World Bank for budget support, but insists the government is not broke.
In an interview with the Nation on Tuesday, Treasury Cabinet Secretary Henry Rotich explained that the money will go towards the Big Four agenda.
But he said the government is still waiting for a decision from the World Bank on its request, which has been met by outrage. The loan comes barely after Kenya borrowed Sh210 billion in another Eurobond.
"This is a development policy operation by the World Bank. It is being given to many countries. Yes, it is a budgetary support but we have had to sacrifice our own projects so as to turn it into a budgetary support," Mr Rotich said.
"It doesn't add to debt because we cancelled some projects. If a project is slow moving and say there are other challenges, instead of losing the money, let us convert them into budgetary support and implement," he added.
He said the money will go towards agriculture, universal healthcare, manufacturing and housing sectors.
President Mwai Kibaki's government kept away from this type of credit that the Jubilee administration has now revived.
"We have not been in it for a while, but we decided to use it. It is quicker, more effective and money reaches where it is intended as opposed to project-based. We are avoiding too many projects," Mr Rotich said.
Amani National Congress party leader Musalia Mudavadi has hit out at the Jubilee administration over its high appetite for borrowing billions of shillings, which only end up in the pockets of a few individuals.
Mr Mudavadi, in what he called State of the Nation address, expressed concern over rising public debt caused by the government's borrowing spree, which has left Kenyans with higher taxes to repay the loans.
Mr Mudavadi challenged the government to account for every shilling it has borrowed and show development projects that have been put up with the funds.
Figures from the Central Bank of Kenya (CBK), as of September last year, indicated that the public debt was Sh5.1 trillion with Mr Mudavadi claiming that most of the money cannot be accounted for.
"How long will this reckless borrowing without accountability go on? The Jubilee government and their partners must now tell Kenyans the true level of their country's indebtedness and the detailed terms and conditions around each debt. Kenyans have a right to know," Mr Mudavadi said.
He challenged President Uhuru Kenyatta to use the forthcoming Madaraka Day celebrations to provide a clear roadmap on where the country is headed and comprehensively address the rising public debt menace.
He said there has been remarkable misrule and abuse of institutions where State officers steal billions of shillings by hiding money in their respective budgets.
"The State has been largely dysfunctional, and especially now. Our country seems to be in a free fall at the behest of robber barons that have invaded the government," Mr Mudavadi said.
"We are seeing a country that is over-borrowing so as to satisfy the greedy appetite of a few thieves. Our country is adequately resourced to feed everyone's needs. But it does not have enough resources to feed everyone's greed," he added.
In a bid to reduce the government appetite for loans, Mr Mudavadi said Parliament should establish an independent public debt management authority to manage present debts and future borrowing.
"When we wrestled independence from the colonial master, the objective was not to run down our country. The intention was to build a thriving nation with equal opportunities," Mr Mudavadi said.
Mr Mudavadi called on President Kenyatta to sack Cabinet secretaries who have been associated with stealing from public coffers.