Treasury might spend less in the next financial year according to austerity measures that are being instigated by the Cabinet Secretary Ukur Yattani.
Treasury’s fiscal consolidation plans, seeks to narrow the gap between the amount of money it spends and the cash it collects in taxes.
This will see a cut in ministries, departments and State agencies budgetary allocations in a bid ensure debt is maintained within sustainable levels.
In the Draft Budget Policy Statement (BPS) for the financial year July 2020 to June 2021, treasury plans to spend Sh2.74 trillion, a decrease from the Sh2.87 trillion it plans to spend in the current financial year.
The fiscal deficit has been narrowed by Sh88 billion, with the Treasury estimating that it will borrow Sh569.4 billion in the next financial year. This is down from Sh657.4 billion that the country expects to borrow from both external and domestic investors by end of June this year.
However, domestic borrowing is expected to go up, with the government expected to borrow Sh318.7 billion in the next financial year compared to Sh300.7 billion that it expects to borrow from the local market in the current financial year.
Kenya’s total loans climbed back to Sh6.02 trillion after the government added Sh60.7 billion to its stock of debt in November 2019.This means that in the first four months of the current financial year ending June 30, 2020, the debt jumped by Sh220 billion as the Treasury borrowed more than it repaid.
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