National Assembly Budget Committee Chairperson, Ndindi Nyoro, on Thursday, June 15, disclosed how President William Ruto planned to offset part of the Ksh9.4 trillion debt in the 2023/2024 budget.
During an interview, Nyoro clarified that his committee had raised the allocation for the Consolidated Funds Services (CFS), which encompasses government revenues, such as taxes, fees, fines, and other income generated by public entities.
The Consolidated Fund serves as the main account for funding government expenditure, including recurrent expenses, infrastructure projects, welfare programs, and meeting public debt obligations.
According to the Kiharu MP, the increased allocation to CFS would enable Kenya to service a larger portion of its debts. This approach, according to him, stands in sharp contrast to the actions taken by previous governments.
The MP, who also shares a cordial working relationship with President William Ruto stated that the current administration has also reduced the budget deficit by over Ksh400 billion, which he observed would help curb overdependence on loans.
"We allocated more money to the CFS because we want to become more independent. On the other hand, when it comes to the deficit, we have significantly reduced that.
"We found a deficit of Ksh1.1 trillion and we have reduced it to Ksh718 billion, " he stated.
Nyoro also added by reducing former President Uhuru Kenyatta's final budget by Ksh300 billion in September 2022, Ruto reduced the need for the government to borrow.
"In the supplementary budget, we reduced the fiscal deficit to 3.7 per cent of the GDP. Right now, it is at 4 per cent of the GDP. We expect to reduce it to 3.6 per cent in the next budget," he added.
On why the Kenya Kwanza administration decided to increase the budget despite the current state of the economy, the lawmaker held that the government was rushing against time to revive the ailing economy.
Kenya's Debt
According to the Treasury, Kenya had an outstanding debt of Ksh9.6 trillion as of March 31 2023.
The country owed China Ksh800 billion, Japan Ksh104 billion and France Ksh101 billion. The total loan owed to the International Monetary Fund (IMF) was Ksh221 billion.
While appearing before the Public Debt and Privatization Committee on June 9, Treasury Principal Secretary, Chris Kiptoo, revealed that Ksh607 billion had been allocated in the budget to repay the debts.
"As per the 2023/24 Budget Estimates’ fiscal framework, the external debt disbursement is estimated at Ksh607.1 billion, out of which Ksh475.6 billion will be used for external debt repayment, leaving net foreign financing of Ksh131.5 billion," he stated at the time.
