On Thursday, February 15, the government announced plans to raise Ksh700 billion from loans borrowed both domestically and internationally to cover the budget deficits expected in the 2024/25 financial year.
Ksh326.1 billion will be raised from external financing, while the other share of Ksh377.7 billion will be through domestic borrowing.
Treasury Ministry in its budget policy statement stated the government plans to cut its budget deficit for the 2024/25 accounting year while also trying to preserve growth-supporting expenditure.
"The government will continue with the growth-friendly fiscal consolidation plan by containing expenditures and enhancing the mobilisation of revenues to slow down growth in public debt without compromising service delivery," read part of the budget policy statement.
According to the Treasury, the 2024/25 budget is set to rise to an estimated Ksh4.19 trillion (USD28.90 billion) from the previous Ksh3.90 trillion.
It also noted that the economy is projected to expand at 5.5 per cent this year, as stated in its previous forecast.
The deficit according to the Treasury, will narrow to 3.9 per cent of Gross Domestic Product (GDP) from 4.9 per cent in this financial year.
County allocation has been set for Ksh445.84 billion up from Ksh424.93 billion in 2023/24.
Parliament has until February 28 to approve the budget policy statement with the consolidation of draft budget estimates expected to be done by April 12.
The 2024 BPS is the second to be prepared under President William Ruto's administration and is aimed at setting out broad strategic priorities and policy goals to guide the government.
According to the Treasury, 2024 BPS aims to improve the public’s understanding of Kenya’s public finances and guide public debate on economic and development matters.
"The policy measures outlined in the 2024 BPS are expected to improve the economy-wide efficiencies, create an enabling environment that supports growth in businesses and investment, reduce the cost of living as well as enhance the wellbeing of all Kenyans," read the BPS in part.
