Govt to Borrow Ksh700 Billion to Finance 2024/25 Budget
On Thursday, February 15, the government unveiled intentions to secure Ksh700 billion through a combination of domestic and international loans to address the anticipated budget shortfalls in the 2024/25 fiscal year.
A total of Ksh703.8 billion will be sourced, with Ksh326.1 billion coming from external financing and the remaining Ksh377.7 billion obtained through domestic borrowing.
In its budget policy statement, the Treasury Ministry expressed the government’s intention to reduce the budget deficit for the 2024/25 fiscal year while simultaneously aiming to maintain spending that supports economic growth.
“The government will continue with the growth-friendly fiscal consolidation plan by containing expenditures and enhancing the mobilization of revenues to slow down growth in public debt without compromising service delivery,” read part of the budget policy statement.
As per the Treasury, the projected budget for the 2024/25 fiscal year is expected to increase to approximately Ksh4.19 trillion (equivalent to USD28.90 billion), up from the previous Ksh3.90 trillion.
It also mentioned that the economy is expected to grow by 5.5 percent this year, as outlined in its earlier prediction.
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According to the Treasury, the deficit is expected to decrease to 3.9 percent of the Gross Domestic Product (GDP) from 4.9 percent in the current fiscal year.
The county’s designated funds have been increased to Ksh445.84 billion from Ksh424.93 billion in the fiscal year 2023/24.
The Parliament needs to endorse the budget policy statement by February 28, and the compilation of draft budget estimates is anticipated to be completed by April 12.
The 2024 Budget Policy Statement (BPS) is the second one crafted during President William Ruto’s leadership. Its purpose is to outline overarching strategic priorities and policy objectives that will steer the government’s direction.
As per the Treasury, the primary goal of the 2024 Budget Policy Statement (BPS) is to enhance public comprehension of Kenya’s financial matters and provide direction for public discussions on economic and developmental issues.
“The policy measures outlined in the 2024 BPS are expected to improve the economy-wide efficiencies, create an enabling environment that supports growth in businesses and investment, reduce the cost of living as well as enhance the wellbeing of all Kenyans,” read the BPS in part.
Govt to Borrow Ksh700 Billion to Finance 2024/25 Budget