Gov’t seeks to raise Ksh.170B with revival of Finance Bill 2024 provisions

Officials from the National Treasury have defended the government’s decision to reintroduce parts of the rejected Finance Bill, 2024, claiming it is essential to reduce borrowing.

Speaking to Citizen TV, Albert Mwenda, Director General of Budget, Fiscal, and Economic Affairs at the Treasury, noted that the government aims to raise Khs.170 billion these reintroduced measures.

Mwenda noted that while this amount – which is between 0.9% and 1% of Gross Domestic Product (GDP) in revenue - won’t fully cover the revenue lost when the Bill was shelved, it will help reduce the fiscal deficit.

“Remember what was lost was estimated at 1.9 to 2 per cent of GDP, so we are not going to recoup everything that we lost in the Finance Bill. The intention of this is also to ensure we don’t lose on the good proposals that Kenyans had proposed to Treasury,” he said.

To further strengthen the fiscal position, the Treasury is exploring alternatives like shifting from Eurobond reliance to domestic capital markets, leveraging corporate bonds, debt swaps, and public-private partnerships.

Mwenda was speaking at the FSD Sustainable Capital Market Conference, where the British High Commission announced a $5.2 million (Ksh.667 million) fund to support SMEs in Kenya.

Sector players also urged the government to enhance the capital market to address the funding gap.

Mark Napier, CEO FSD Kenya, said: “The need for a more innovative capital market has never been greater than it is today because we know business usually is not working, and it needs to change. We have an opportunity to do that.”

Neil Wigan, British High Commissioner to Kenya, on his part noted: “This is an important moment for us…we think this fund, which can be listed, will help develop the capital market.”