President William Ruto, on Thursday, April 27, projected growth in the country's revenue by 6.1 per cent and maintaining that momentum over the medium term.
According to a dispatch from Cabinet, Ruto projected that the revenue will stand at Ksh2.8936 trillion in the 2023/24 financial year, surpassing revenue collected during the last year of former President Uhuru Kenyatta's last term, which stood at Ksh2.528 trillion in the 2022/23 financial year, recording a Ksh365 billion increase.
To further support the positive trajectory, Ruto indicated that the revenue collection is expected to shoot to Ksh4.1952 trillion in the 2026/27 financial year, representing 18.3 per cent of the Gross Domestic Product.
Ruto pegged his revenue growth projection on robust activity in the service sector, wholesale and retail as well as accommodation and food services.
Other key indicators listed by Ruto's Cabinet included robust activities in education, information and communication.
"The growth outlook will be supported by a broad-based sector growth, including the continued strong performance of the service sector and recoveries in Agriculture, while the public sector consolidates.
"From the expenditure perspective, private consumption is expected to support aggregate demand, supported by the ongoing labour market recovery, improved consumer confidence and resilient remittances," the cabinet further observed.
The cabinet projected Ruto's government expenditure in the 2023/24 financial year to stand at Ksh3.5993 trillion, equivalent to 22.1 per cent of the Gross Domestic Product (GDP).
In the 2023/24 financial year, Ruto projected that the counties would be allocated Ksh385.4 billion and Ksh22.9 billion to Judiciary.
To mainstream his bottom-up agenda, Ruto adopted a value chain approach to budgeting and committing Ksh267.7 billion.
"The value chain approach allows mapping the production process throughout the value chain to the final market transaction.
"The resource allocation in the value chain approach to budgeting ensures efficiency by eliminating gaps and duplications," it added.
According to the Cabinet, the new strategies are expected to help President Ruto's administration address debt and the high cost of living.
His economic advisor David Ndii had earlier revealed that most of the revenue collected was channeled toward paying debts.
The debt crisis had affected his administration leading to salary delays. Ndii further implied that cash resources were short in supply, whereas the demand was high from various sectors, including public servants.
"Is public finance that difficult? It's reported every other day debt service is consuming 60 per cent plus of revenue. Liquidity crunches come with the territory. When maturities bunch up, or revenue falls short, or markets shift, something has to give. Salaries or default? Take your pick," Ndii posed.
"Foreign debt is not the issue. I'm talking about weekly maturities of domestic debt held by your banks and pension funds (80 per cent plus of debt service)," he further clarified.
However, Ruto insisted that his administration would not default on credit. Further, he ruled out going for foreign loans to pay salaries.
