Kenya’s budget to drop 9% to Ksh.3.01 trillion as Ruto rethinks strategy to shrink debt

Kenya’s 2022/23 National Budget will drop by 9 percent to Ksh.3.01 trillion from the current Ksh.3.31 trillion as President William Ruto rethinks strategy to lower the cost of debt repayment.

The slash will take a toll on the ministries and the President has already instructed the National Treasury to work with them to do away with Ksh.300 billion from the current budget.

All the 22 ministries will be forced to narrow their spending as the new regime prioritises agenda to save millions of suffering Kenyans due to lack of food, water and ballooning unemployment rate.

“I have instructed the National Treasury to work with ministries to find savings of Ksh.300 billion in this year’s budget. Next year, we will bring it further down so that, by the third year, we have a recurrent budget surplus,” said the President.

The president is keen to bring down the debt burden beginning next year and said the government should never borrow to finance recurrent expenditure – “the market cannot sustain the kind of borrowing we are doing as a government”.

Kenya’s debt hit Ksh.8.5 trillion from both foreign and domestic borrowing, with the President optimistic that in the third year of his reign, he would have narrowed the burden to ensure an existing recurrent budget surplus.

“Over the next three years, we must reverse this and go back to the situation where government contributes to the national savings effort by keeping recurrent expenditure below revenue.”

The Ksh.300 billion slash from the 2022/23 budget will revise the annual budget to Ksh.3.01 trillion from Ksh.3.31 trillion.

A friendly-tax regime also played key in his maiden speech to the joint sitting of the bicameral house at the National Assembly.

“This is best achieved by a hierarchy that taxes wealth, consumption, income, and trade in that order of preference. Our tax regime currently falls far short of this. We are over-taxing trade and under-taxing wealth. We will be proposing tax measures that begin to move us in the right direction.”

He also indicated that the government will also work with the Kenya Revenue Authority (KRA) on a culture change to make it a people-friendly, customer-centric organisation.

He also said he will see through the current Kenya Revenue Auhtority (KRA) renamed Kenya Revenue Service (KRS).

“I am of the view that we should rename it the Kenya Revenue Service in line with the proposed transformation.”

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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