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HomeNewsKenya in a Financial Hole: Treasury CS Njuguna Ndung'u

Kenya in a Financial Hole: Treasury CS Njuguna Ndung’u

Kenya in a Financial Hole: Treasury CS Njuguna Ndung’u

Prof. Njuguna Ndung’u, National Treasury Cabinet Secretary, admits that the country’s economy is stressed, citing a lack of resources to fund critical public expenditure.

Simply put, the country is in debt, and Ndung’u, while comparing the national budget to a household budget, claims that the available resources are less than the listed expenses, urging Kenyans to be patient.

His concession on the country’s economy dampens hopes for lower living costs for millions of Kenyans who are currently in distress.

“Ukiwa unaishi kwa hii nchi unajua ile matatizo ya hela iko hii nchi, it is something we have to resolve, we have a resource constraint…hatuna hela, lazima tujisaidie. Lakini tukipata hela, yote yatawezekana…tumetoka mbali, huo upungufu utakwisha, hatuwezi sema utaisha leo au kesho, lakini tutakuja kutatua hiyo shida…,” said the Treasury CS on Wednesday.

He was speaking at a Senate Standing Committee on Finance and Budget induction forum.

The CS’s national economic status update is a bitter pill to swallow for millions of Kenyans struggling to make ends meet.

“Tuna upungufu, lazima tutulize, tungojee mpaka wakati utafika tuseme tumepata suluhu…bado tuko kwa shimo, lazima tujue hivyo. Kama unaishi hii nchi lazima ujue hivyo…,” added Prof. Ndung’u

The cabinet secretary falls short of actualizing government austerity measures in his statement on the first supplementary estimates for Fiscal Year 2022/2023 transmitted to the National Assembly.

Only Ksh.106 billion is proposed as a deduction from development spending, with the remaining Ksh.92.2 billion reallocated to recurrent expenditure. This leaves the government with only Ksh.13.3 billion in savings.

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The taxman missed the revenue collection target by Ksh.51.8 billion in the first half of the fiscal year, which ran from July to December last year. The Ksh.108.6 billion shortfall is due to lower absorption in recurrent and development expenditures of Ksh.52.1 billion and delayed disbursement to county governments of Ksh.56.6 billion.

“Hata wewe kwako nyumbani unaweza kuwa broke, lakini si uko na nyumba unakaa? Ni mahitaji yale uko nayo na zile pesa uko nazo unaona hazilingani…? Serikali ni kama kwako nyumbani, uko na mahitaji lakini pesa ya kutosheleza mahitaji yote hakuna. Lakini ukingoja kidogo, ufanye kazi kwa bidi, unapata hela za kutosheleza hayo mahitaji…,” said the CS.

Governors are currently at odds with the national government over the delayed disbursement, despite their demand for a larger share of the pie in the 2023/2024 budget.

The 47 devolved units are requesting a shareable allocation of Ksh.425 billion in the 2023/2024 budget, while the revenue allocation commission proposes a Ksh.407 billion allocation to county governments.

However, the Executive has insisted that only Ksh.380 billion is available.

“Ksh.425 billion is a good figure, but we don’t have it. Ksh.407 billion is not bad, but we don’t have it; the truth is that we only have Ksh.380 billion. If you want to hang us, we’re helpless; if you want to take off our pants and whip our buttocks, go ahead; we don’t have the money. What we don’t want is to deceive the governors into thinking we’ll give them money we don’t have…,” DP Gachagua recently stated.

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Governors will meet with President Ruto this weekend in a retreat to discuss the financial standoff.

For the time being, the National Treasury says the priority is to manage the national debt, which stood at Ksh.8.7 trillion in September of last year.

“If we borrow, we can only borrow to rescue the expensive short-term debt, such as domestic debt, so we have to borrow concessional to solve the expensive debt, we will solve that, it is solutions that can work, solutions that have been seen to work…,” Prof. Ndung’u says.