Nairobi
Thursday, 13 June, 2024
By Felix Mogaka
The National Treasury of Kenya has announced an increase in its borrowing target to Sh597 billion for the upcoming fiscal year, signaling a strategic push to fund key development projects and bolster economic growt.
“This is a strategic decision to accelerate our development agenda and ensure that we have the necessary funds to support our ambitious infrastructure projects,” said National Treasury Principal Secretary Chris Kiptoo while appearing before the National Assembly’s Finance Committee.
The decision aligns with Finance Minister Njuguna Ndung’u’s optimistic growth projection of 5.5% for both 2024 and 2025, shared during the budget presentation to parliament earlier today.
“We are on a solid path to economic stability and prosperity, with our policies aimed at fostering growth and improving the quality of life for all Kenyans,” Ndung’u said.
Despite concerns over the country’s debt situation, which is expected to worsen in the medium term, Kiptoo defended the move.
“The additional taxes and expanded tax base will secure the necessary funds for development, ensuring that investment in key sectors does not stall,” he said.
The raised borrowing target is part of a broader financial bill that outlines Kenya’s economic plan for the coming year.
It includes measures to enhance revenue collection and streamline government spending.
The bill also proposes reforms to improve the efficiency of public service delivery and foster a more conducive environment for business and investment.
As Kenya positions itself as a leading economy in the East African region, the government’s financial strategy is closely watched by investors and international financial institutions.
The move to increase the borrowing limit signals a commitment to maintaining the momentum of economic growth and development initiatives.
The National Assembly is expected to debate the Finance Bill 2024 in the coming weeks, with stakeholders from various sectors weighing in on its implications.
The outcome of these discussions will shape the fiscal landscape of Kenya for the next year and beyond.
In addition to the raised borrowing target, the Treasury has also earmarked funds for the digitization of government services.
“The introduction of digital IDs for livestock will enable farmers to better manage their herds through improved tracking of feeding, disease control, and vaccinations,” Kiptoo said.
Furthermore, the government has pledged to continue its support for the technology sector, recognizing its potential to drive economic development.
“Initiatives such as the establishment of innovation hubs and the expansion of broadband connectivity are expected to attract more tech startups and create employment opportunities, particularly for the youth,” said Eliud Owalo an official from the Ministry of ICT.
The finance ministry’s approach is not without its critics, however. Some economists have expressed concern over the sustainability of the debt levels, urging the government to focus on generating more revenue internally rather than relying on borrowing.
“We need a more balanced budget that prioritizes essential services and long-term economic stability,” said Dr. Joyce Kimani, a Nairobi-based economist. As the debate over the Finance Bill 2024 unfolds, the eyes of the nation and the world remain fixed on Kenya. The decisions made in the coming days will have far-reaching implications for the country’s future, setting the stage for either continued prosperity or potential fiscal challenges.