Treasury to borrow Ksh.60.5 billion more for mini-budget

The National Treasury is expected to borrow Ksh.60.5 billion more in the year to June to fund the just announced 2021-2022 supplementary budget.

According to new estimates from the planning Ministry, net foreign financing is expected to rise from 2.2 per cent of GDP to 2.9 per cent of GDP while net domestic financing will ease by 100 basis points to 5.2 per cent of GDP.

Using figures in the 2021 Budget Policy Statement implies net foreign financing will move to Ksh.352.4 billion from Ksh.267.3 billion while net domestic borrowing eases to Ksh.638.5 billion from Ksh.663.1 billion.

At the same time, the exchequer projects total revenues to jump to 16.8 per cent of GDP or by Ksh.50 billion to Ksh.2.084 trillion.

In the broader picture, the Ksh.108.5 billion mini-budget is expected to leave a greater budget hole with the overall fiscal deficit to June now estimated at 8.1 per cent of GDP from an earlier projection of 7.5 per cent.

Among the biggest winners in the secondary budget are Kenya Airways which will be wired Ksh.26.6 billion to help it stay afloat amidst financial woes.

The State’s fuel stabilisation mechanism is meanwhile set to receive Ksh.24.9 billion while the Independent Electoral and Boundaries Commission (IEBC) will be handed Ksh.8.8 billion to plan for the upcoming August 9 General elections.

The supplementary budget estimates are now the subject of approval by Parliament.