Political Economist Billow Kerrow raised fears that Kenya's public debt may rise to Ksh12.4 trillion by the end of President William Ruto’s first term in office.
Billow, while appearing on Citizen TV's Daybreak Show on Wednesday, January 25, explained that the debt would balloon because of the unsustainable budget deficit.
Currently, Kenya’s public debt stands at Ksh8.6 trillion, and Billow believed that the government may be forced to borrow more than Ksh3.9 trillion to finance its budget.
“Kenya has had a constant deficit of 9 per cent of its total budget, and the current government, through its proposed draft budget policy statement, has done nothing to avert that.
“There is an ambitious revenue target which will make it impossible to bring down the deficit,” Billow explained.
Billow remarked that the move contradicted Ruto’s pledge that the country would reduce external debt reliance.
“As a country, we would reduce public debt by not borrowing to finance recurrent expenditure in the future.
“The Treasury has my instructions to find at least Ksh300 billion in this year’s budget so that we can remove it,” Ruto promised Kenyans on September 22, 2022.
Billow explained that Ruto’s concerted efforts to reduce the country’s budget would not work as a way of reducing the public debt.
“The President has plans to spend above Ksh5 trillion in the next five years for his development agenda.
“Even with the ambitious revenue targets, the government has not come up with a strategy to reduce the crippling high expenditure,” Billow remarked.
He further explained that the projected Ksh12.4 trillion debt could be surpassed because Ruto’s government has leaned on the conservative side while drafting the budget.
“The government hopes to expand its revenue base. For example, the target revenue collection for this financial year ending June 2023 is Ksh2.07 trillion, but we are already behind.
“What if we do not achieve those targets? What other option will be there except more borrowing? Billow posed.