President Ruto Increases Foreign Borrowing with Revised 2023/24 Budget
The administration of President William Ruto will increase foreign borrowing after revising the budget for the 2023/24 fiscal year from Ksh3.7 trillion to Ksh3.9 trillion.
In the Budget Review and Outlook Paper (BROP) released by the Treasury on Sunday, the government increased the sum to be borrowed from the international market from Ksh131 billion to Ksh449 billion, while reducing domestic borrowing to Ksh415 billion.
Treasury expects to finance the increased budget with increased tax revenues and upwardly revised foreign borrowing.
Ruto came to power on the promise of reducing wasteful expenditure and borrowing, but he has since increased foreign and domestic loans.
As pledged by Central Bank Governor Kamau Thugge, borrowing from the domestic market has decreased, but not by the initially projected Ksh316 billion.
From the Ksh583 billion that was approved by parliament in June, the government will borrow Ksh411 billion domestically.
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The government intends to reduce interest rates and increase lending to the private sector by reducing local banks’ demand for debt.
Adjustments to national government spending have necessitated revised expenditures.
In the budget, ministerial national government expenses were allotted Ksh2.38 trillion; however, this amount has been reduced to Ksh2.4 trillion.
In addition, the Treasury will spend Ksh1.3 trillion on interest and pensions, up from Ksh986 billion as originally anticipated.
While the Treasury has increased the budget for National Government expenditures, the equitable share sent to counties has remained at Ksh385 billion.
In response, the Treasury accused County Governments of ignoring the Constitution’s directive to seek out alternative revenue-generation strategies.
“County Governments may borrow in line with Article 212 (a) of the Constitution with guarantee from the National Government. However, since the advent of devolution, no County Government has leveraged this window to borrow,” County Governors were accused.
President Ruto Increases Foreign Borrowing with Revised 2023/24 Budget
