Treasury CS Ukur Yatani to unveil Ksh3.6 trillion budget on Thursday
As the country prepares to unveil its Ksh.3.6 trillion budget on Thursday this week, the country’s public debt still remains a matter of concern.
But even as analysts argue that the debt is rising to dangerous levels, the National Treasury has downplayed those claims saying it is sustainable.
Yatani will be tabling Kenya’s biggest budget so far at Ksh.3.6 trillion. Out of this, Ksh.2 trillion will be proceeds of the government’s revenues, leaving a hole in excess of Ksh.1 trillion.
To make ends meet, the treasury plans to borrow over Ksh.900 billion to fill the shortcoming in tax revenues. And therein lies the problem, as the country’s public debt continues to swell.
Kenya’s public debt began to swell at an alarming rate from the year 2013 due to increasing government spending plans, forcing it to take loans to support the budget.
The public debt has nearly quadrupled. Statistics from the Central bank show the public debt stood at Ksh.1.8 trillion in January 2013. As at the beginning of this year, this figure stood at seven point four trillion.
The outbreak of COVID-19 pandemic has seen the government borrow more to support its response to the pandemic with treasury maintaining its living within its means.
“We are firm. Our fiscal framework is healthy but revenues are lagging behind,” says Ukur Yatani, CS, National Treasury.
Economic observers however say the debt burden is worrisome and could damage the economy in the long-term.
“The issue of fiscal consolidation is important…we are saying you must cut our coat according to our cloth… You can’t live on a budget on aKsh.100 million yet you earn Ksh.200,000,” says Rose Mwaura, Chairman, Institute of Certified Public Accountants (ICPAK).
The recent debt relief has given the country some breathing space. In January this year, Kenya got a six months debt repayment holiday from the Paris Club of creditors.