8/11/2023 0 Comments Daily nation newspaper kenya![]() ![]() “I wish to assure Kenyans and investors that our fiscal position remains strong and the government remains committed to meet all maturing obligations, as and when they fall due, including the maturing Eurobond,” Ndung’u said. The government plans to borrow Sh131.5 billion externally (equivalent to 0.8 percent of GDP) and net domestic financing of Sh586.5 billion (equivalent to 3.6 percent of GDP), to bridge the fiscal deficit in the next financial year, starting July 1. In preparation for the redemption of the maturing bond, National Treasury issued an expression of interest, to bring on board a Lead Manager to advise the government on liability management options towards the resolution of the Eurobond 2024. The country’s external debt service is projected to increase to Sh475.6 billion in the financial year 2023/24 from Sh242.1 billion in the current financial year, mainly reflecting the redemption of the $2 billion (Sh279.9 billion)Eurobond. The proposed change, the CS said, provides an appropriate guide for optimal level of public debt based on the country’s ability to pay. The government intends to change the public debt ceiling from a numerical number to a Debt Anchor in form of a ratio of public debt to GDP in present value terms.Ĭurrently, the limit of public debt as approved in 2020 by MPs, is Sh10 trillion. Over the medium term, the revenue-driven fiscal consolidation policy stance is expected to improve further the country’s debt sustainability ratios and debt-carrying capacity. This, he said will improve the country’s debt sustainability position.Īlthough the debt burden has risen, Kenya has not accumulated debt service arrears and the government is committed to honour all public debt obligations as they fall due, the CS affirmed. He said the government would implement an effective liability management strategy, without compromising service delivery to citizens. “The fiscal policy stance over the medium term aims at supporting the government’s Bottom-Up Economic Transformation Agenda through a growth-friendly fiscal consolidation plan, designed to slow down the annual growth in public debt,” CS Njuguna said. The total public debt is projected to reach Sh11.5 trillion by June 2025, on account of expanding fiscal deficit.ĭuring his budget speech on Thursday, National Treasury and Economic Planning CS Njuguna Ndung’u said the government will continue to support economic recovery by pursuing prudent macroeconomic policies, geared towards reducing debt vulnerabilities and supporting sustainable and inclusive development. The gross public debt is comprised of 50 percent external debt and 50 percent domestic debt. The Present Value (PV) of external debt-to-export and Public and Publicly Guaranteed (PPG) of debt-service-to-exports indicators remain above the thresholds over the medium-term projection period.Īs the economy recovers from global shocks and fiscal consolidation continues, Kenya’s debt indicators are expected to improve, ICPAK noted. The country’s debt remains, according to financial experts, but is categorized as facing high risk of debt distress (IMF Country Report No. Kenya’s debt stood at Sh9.4 trillion as of March, Central Bank of Kenya (CBK) data shows. “This is a role that parliament should take seriously,” the statutory body of accountants said. It has expressed doubts if the reforms go deep enough to arrest private vested interests in the management of debt. “Whereas the government has outlined several measures to mitigate debt the crisis, including policy reforms, fiscal consolidation, measures to reduce waste, debt moratorium with external lenders, political accountability remains low,” ICPAK said in a post-Budget statement on Friday. This includes a reduction in the country’s fiscal deficit by increasing tax revenues to tame borrowing, in funding the Sh3.7 trillion budget for the next financial year, starting July 1.Īccording to the Institute of Certified Public Accountants of Kenya (ICPAK), oversight over debt management and reforms remains weak and crucial debt information is inaccessible. Parliament should take oversight over debt management and reforms seriously, accountants now say, even as the government moves to implement measures to mitigate a debt crisis. ![]()
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