With an estimated budget of 3.68 trillion, the government projects to raise 2.96 trillion through revenue collection, leaving a budget deficit of KES 718 trillion. According to the Treasury Secretary, Prof. Njuguna, this deficit will be financed through borrowing both internally and externally. Net external borrowing is projected at KES 131.5 billion, with net domestic borrowing estimated at KES 586.5 billion.
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The government projects to cut the fiscal deficit, currently at 5.8%, down to 4.4% in the coming financial year through an aggressive revenue mobilization strategy, which would see the government reduce overreliance on multinational organizations such as the World Bank and International Monetary Fund (IMF). The CS insisted that Kenya’s public debt is currently sustainable, but there are possibilities of elevated risks of debt distress due to the existing global shocks that adversely affect liquidity ratios in many economies.
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The country’s public debt hit KES 9.29 trillion in the first quarter of 2023, according to the latest report from the national treasury. The domestic debt stood at KES 4.539 trillion, with external debt at KES 4.85 trillion, representing 48.3% and 51.7% of the total debt stock, respectively, as reported by the Treasury. On the same breath, the controller of budget (COB) stated that the total expenditure on public debt for the financial year 2022-2023 amounted to KES 831.01 billion, an increase from the previous financial year, which was at KES 651.73 billion, and comprised expenditures on external debts of KES 302.6 billion and on domestic debt of KES 528.5 billion.
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While presenting the budget before the national assembly, Prof. Njuguna pointed out that pending bills in the government have been on an upward trajectory and proposed the establishment of a pending bills verification committee whose mandate would be to carry out an analysis of all pending bills and give insights on how to settle them in advance. This move would help tame the urgent need for government borrowing, which would help revise the public debt downward in the coming financial years.
