Govt to Borrow KES 700 Billion to Address the KES 3.6 Trillion Budget Deficit

The Government is to borrow KES 700 billion to finance KES 3.6 Trillion budget deficit for the fiscal year 2023/2024.

The 2023/24 budget is set to increase by KES 251 billion compared to the previous year’s budget of KES 3.39 trillion.

The government has allocated KES 2.5 trillion for recurrent expenses and KES 769.3 billion for development.

As per the policy statement presented by Budget and Appropriation Committee Chair Ndindi Nyoro, the national government will receive KES 2.25 trillion while KES 385 billion has been apportioned to devolved units.

The Executive has been allocated KES 2.1 trillion, with Parliament receiving KES 40 billion and the Judiciary getting an allocation of KES 22.9 billion from the KES 2.25 trillion.

Additionally, the Auditor General, Equalization fund, Conditional grant, and the Medical equipment scheme have received allocations of KES 7.6 billion, KES 7.8 billion, KES 44 billion, and KES 4.5 billion, respectively.

To finance the budget, the government will borrow KES 700 billion, with KES 198.6 billion raised from external sources and KES 521.5 billion from the domestic market.

The Kenya Revenue Authority has been assigned the target of collecting KES 3 trillion in the financial year 2023/24, up from KES 2 trillion collected in the previous financial year.

To achieve this goal, various tax policy measures have been implemented to boost tax collection in line with the revenue target.

While presenting the report, Nyoro emphasized that the budget has prioritized essential pillars in the Kenya Kwanza Administration’s bottom-up economic model, such as Agriculture, Health Care, and Housing.

He also projected that the economy would grow by 6 per cent while the global economy would grow by 2 per cent.

Furthermore, he revealed that the National Government Constituency Development Fund(NGCDF) ceiling had been raised from KES 44 billion to KES 55 billion in the 2023/2024 budget policy statements.

He clarified that an extra KES 1 billion had been added to cater for women representatives and each constituent would receive an additional KES 20-30 million.