Connect with us

Hi, what are you looking for?

Cyprian Is Nyakundi

Business

Treasury Projections: Uhuru To leave The Presidency With A Ksh 7 Trillion Debt

President Uhuru Kenyatta will accumulate nearly Sh2.13 trillion more in public debt by the time his final term ends in August 2022, Treasury projections show, signalling increased pressure on taxpayers’ funds.

Treasury chiefs project in draft Budget Review and Outlook Paper that total debt will jump to nearly Sh7.17 trillion in the year ending June 2022, from nearly Sh5.04 trillion this June.

If that comes to pass, Mr Kenyatta will have contracted at least Sh5.27 trillion debt to implement his manifesto in 10 years in power after he inherited slightly more than Sh1.89 trillion in June 2013.

The Jubilee administration has ramped up spending since 2013 to build much-needed new roads, a modern railway, bridges and electricity plants, driving up borrowing to plug the budget deficit.

The increased debt has seen Kenya commit more than half of taxes to paying loans, leaving little cash for building roads, affordable housing and revamping of the ailing health sector.

Public debt stood at Sh5.04 trillion in June 2018, up from Sh4.41 trillion in June 2017, Sh3.62 trillion in June 2016, Sh2.83 trillion in June 2015, Sh2.37 trillion in June 2014 and Sh1.89 trillion in June 2013.

Mr Jibran Qureishi, the regional economist for Stanbic Bank, said growth in public debt has partly been driven by over-budgeting leading to ambitious tax targets, which have largely been missed.

The ambitious tax targets, he added, have increased the government’s appetite to continue spending without a corresponding impact on economic growth.

“When you do that (have ambitious revenue targets) from the beginning, you feel like you have enough room for manoeuvre when it comes to expenditure, but the reality is you are not going to achieve that tax number,” Mr Qureishi said.

The growth in Kenya’s debt has raised concerns the ballooning repayment costs are hurting economic activities by taking up a large chunk of government revenue.

Treasury Secretary Henry Rotich plans to spend Sh870.5 billion on debt repayments this year ending June next year from a Sh435.7 billion for the year ended June 2018 against expected taxes of Sh1.76 trillion.

Kenya’s access to cheaper international loans from multilateral lenders has reduced after the economy upgraded to a lower middle-income economy in September 2014. This has seen the country resort to expensive short-term loans from international lenders.

For the period to June 2018, foreign commercial banks accounted for 37.85 per cent (Sh968.9 billion) of the Sh2.56 trillion external debt.

“The emerging concern is that the government’s appetite for borrowing seems unlikely to wane any time soon and this could eventually push debt towards unsustainable levels,” the Parliamentary Budget Office says in its budget watch report released last month.

 

Source link


Would you like to get published on this Popular Blog? You can now email Cyprian Nyakundi any breaking news, Exposes, story ideas, human interest articles or interesting videos on: [email protected] Videos and pictures can be sent to +254 710 280 973 on WhatsApp, Signal and Telegram.


Comments

comments

Click to comment

Facebook

You May Also Like

News

*Editor’s Note: This open letter to Safaricom has been published as received. No redactions have taken place to avoid legal issues pending a court...

News

  These pictures you are about to view calls to heart the need to be extremely careful about what you do in the  secret...

News

This is an intervention for Victoria Rubadiri so as to help her revert back to factory settings. We notice your slow drift away into...

News

Caption : Edwin Kigen Who was Murdered in Madaraka Estate. We demand for answers from Boinnet ! Another young man may have been brutally assaulted and...

Copyright © 2020 Cyprian Is Nyakundi.