Treasury on Friday, September 16, released the statement of actual revenues and net exchequer issues as of August 31, 2022.
This is the amount of money the government collected, spent and kept as balance as of the end of last month.
The Cabinet Secretary, Ukur Yatanu, indicated that the exchequer balance as of August 31 was Ksh93.7 million.
Following the gazette notice issued by Treasury, Nandi senator, Samson Cherargei claimed that the economy was no longer in the intensive care unit (ICU) but in utter ruins.
“President Wiliam Ruto found only Ksh93.7 million at the treasury. Uhuru went home with everything. State Capture is real.
“The country is broke. Kenyans, let us be patient. Ruto shall fix this through economic transformation and prayers from all of us. Amen,” Cherargei claimed, evoking mixed reactions countrywide.
Other financial websites with mass followings also alleged that the government is actually broke and the economy is in ruins.
How Did the Treasury Arrive at Ksh93.7 million?
The government had an opening balance of Ksh616.5 million in July 2022.
For the month of July-August 2022, the total revenue received (money collected) was Ksh 383,374.4 million.
The government spent Ksh383,897.3 million in August. The worrying indication is that the government spent more than it actually collected by Ksh522.9m is what is called a deficit.
The Ksh93.7 million is achieved from the opening balance of July which allowed the government to have room for manoeuvre.
What Do Analysts Say?
Anderson Mwenda, an expert in finance and taxation told Kenyans.co.ke that the government indeed left behind Ksh93.7 million as per the Treasury report.
Mwenda stated that the amount was the real figure as reported by the Treasury.
He, however, did not comment on whether the government was broke and the economy in tatters.
Macharia wa Mwihaki, an accounting and finance expert, through his social media pages, opined that the government consolidated account is not the savings account where you check how much the country saves in a certain month.
“The consolidated account is a summary of the excesses or deficit after collections against expenditures of both levels of government.
“With the taxman at over Ksh146 billion and an excess of Ksh93 million at the consolidated account, the country is steady,” Mwihaki stated.
Nicholas Gachara, a renowned financial expert and CEO of Somakazi, a personalised and packaged career mentorship and technical skill transfer for accountants, argued that the country is not broke as alleged.
‘Looking at the major sources of revenue, Tax remittances accounted for more than 72 per cent of the revenue. This is collected by the Kenya Revenue Authority which has been tasked with an ambitious target for the overall financial period.
“Tax revenues such as Pay As You Earn (PAYE), Value Added Tax (VAT), Customs and Excise can be reliably collected.’ KRA in the last financial year surpassed its targets for revenue collection,” the tax expert indicated.
Gachara was, however, concerned with the high debt financing payments which accounted for 46 per cent of the expenditures.
“The current administration of President Ruto has scaled down on the subsidies in what will be seen as prudent in managing deficits but will hurt the ordinary citizen.
“These subsidies can be diverted to the loan repayments,” he added.
