The Government of Kenya (GoK) is set to cut spending on non-priority areas in the current financial year in a bid to reduce the country’s fiscal deficit and public debt.
Speaking during the launch of the FY 2023/24 and Medium-Term Budget preparation process, Treasury CS Njuguna Ndung’u directed all Sector Working Groups to prioritize spending on growth-supporting capital projects.
The move is expected to reduce GoK expenditures to about 22.7% of GDP over the Medium-Term in line with the fiscal consolidation policy.
“The policy’s main objective is to free resources to growth-enhancing programmes by gradually reducing the overall fiscal deficit and the pace of debt accumulation,” said Ndung’u.
The CS noted that the fiscal consolidation will be supported by enhanced and innovative revenue mobilization, sustained rationalization of non-priority recurrent expenditures, and redirecting resources to finance priority growth-supporting capital projects with a high return on investment.
In the Medium-Term, the government’s fiscal framework will be anchored on the country’s real GDP growth being above 6.0%.
It will also be anchored on inflation being maintained within the range of ±2.5 of the target 5%.
GoK also targets to improve revenue collection to over 18.0% of the GDP over the medium-term.
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