Kenyan government has revealed its intention to borrow Ksh.263 billion from the domestic market as part of its strategy to finance the Ksh.3.92 trillion budget for the fiscal year spanning from June 2024 to July 2025.
Treasury Cabinet Secretary, Njuguna Ndung’u, said during the presentation of the 2024/2025 budget estimates in parliament.
In addition to the domestic borrowing, the government is also eyeing to secure Ksh.333.8 billion in foreign debt, bringing in about Ksh.596.8 billion in total debt.
The goal of these borrowing initiatives is to bridge the significant Ksh.597 billion budget deficit as outlined by Ndung’u.
“The fiscal deficit for the financial year 2024-2025 will be financed by net external borrowing of Sh333.8 billion, equivalent to 1.8 percent of GDP, and net domestic borrowing of Sh263.2 billion,” Ndung’u said.
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The Treasury anticipates a total revenue collection of Ksh.343.2 billion, equivalent to around 18.5 percent of the country’s Gross Domestic Product (GDP).
With the overall government expenditure estimated at Ksh.3.92 trillion for the upcoming financial year, the budget puts much of its efforts in areas of investment such as healthcare, infrastructure, and education.
Prof. Ndungu is keen on stimulating economic growth and development amidst challenging economic times.
By relying on domestic and foreign borrowing, the government’s strategy to repay the debt brings about the controversial Finance Bill, 2024 which millions of Kenyan taxpayers have rebuffed.
The budget estimates put forth by the Treasury will now undergo parliamentary scrutiny and approval in the coming days.
