Nairobi,
Thursday day, 13 June, 2024
By Teddy Makori
In a candid address highlighting Kenya’s pressing financial challenges, National Treasury Principal Secretary Chris Kiptoo revealed that the nation allocates over half of its revenue to debt payment.
Speaking at a pre-budget media briefing at the National Treasury Building on Thursday, 13 June, 2024 , Kiptoo said that .
“For every Sh10 we get from KRA, we use Sh6 to pay debt. This means that we have less money to fund roads, education, and other areas of development.
This is the reality,” The PS remarked. Kiptoo explained that the persistent revenue shortfalls makes the government to borrow more to bridge the deficit.”
The continuing widening of the deficit means we are taking more debts and committing future revenues, which translates to a little amount of money available for development projects like roads and education,” he said.
The Principal Secretary emphasized the need for Kenya to adopt very strategic measures, aiming to reduce borrowing and cut costs.
He further acknowledged the challenge of balancing the budget but stressed that gradual steps must be taken.
“We must really live within our means. There is no room for blame; the reality is that this is where we are because we have taken more than we can afford,” Kiptoo said.
Kiptoo called for a disciplinary approach to spending, suggesting that while an immediate balanced budget is unattainable, various strategies could help the government move the country towards an economic stability.
Kiptoo’s remarks come at a crucial time, just hours before National Treasury Cabinet Secretary Njuguna Ndung’u is set to present the 2024/25 budget estimates to a joint sitting of the Senate and National Assembly.
The budget reading will provide information into how the government plans to address the big financial challenges and outline the measures it will take to manage the country’s debt burden while striving to improve economic growth.
The over-reliance on borrowing has had a very negative effect on Kenya’s development agenda, with very huge portions of revenue set a side for debt repayment, less is available for important sectors in the country such as infrastructure, education, and healthcare a scenario that has led to a growing concern among economists and policymakers about the sustainability of Kenya’s economy Additionally, Kiptoo addressed the critical need for economic reforms that would boost revenue generation and reduce the huge economic burden facing the country.
He pointed out that while the government faces tough decisions ahead, it is important for it to come up with sustainable ideas and strategies that will enable long-term economic stability in the country.
This includes finding innovative ways to enhance revenue collection and prioritizing spending on projects that will bring economic returns.
As the nation awaits the budget presentation, Kiptoo’s speech brings lots of discussions on Kenya’s economic strategy.
His remarks also paints a picture of a nation struggling with the consequences of excessive borrowing and insufficient revenue.