BUDGET

Kenya spent Sh33.7 billion to repay debts in July – Treasury

A collection of Sh107.4 billion in domestic revenue in July means, KRA is likely to collect only Sh1.28 trillion in the year if current trend persistS

In Summary
  • Generally, the government had a total revenue collection of Sh206.6 billion in July out of annual revenue collection target of Sh2.59 trillion
  • Kenya’s public debt has grown by a trillion during President Uhuru Kenyatta’s administration from Sh4.8 trillion in 2013 to current Sh5.8 trillion
Treasury buildings.
Treasury buildings.
Image: MONICAH MWANGI

Kenya spent a third of its domestic revenue collected in the first month of 2019/20 to repay debt, the statement of actual revenues and net exchequer issues as at end of last month shows.

The details contained in the latest edition of the Kenya Gazette shows that the country spent Sh33.7 billion to pay debts out of Sh107.4 billion collected by Kenya Revenue Authority during the month, accounting for 31.3 percent of domestic revenue.

The debt service rate rate in the first month of the year is however seven per cent lower compared to the projected annual usage.

 

According to the budget statement for the current financial year as presented in June, the country will spend Sh696.5 billion to service public debt from Sh1.807 trillion domestic debt to be collected by the taxman.

The country is currently in the spotlight for its high debt appetite amid low revenue collection.

Kenya spent Sh670.8 billion to repay public debt in the financial year ended June 30 from Sh1.58 trillion domestic revenue collected by KRA against a target of Sh1.605 trillion.

Kenya’s public debt has grown by a trillion during President Uhuru Kenyatta’s administration from Sh4.8 trillion in 2013 to current Sh5.8 trillion.

Data from the Central Bank of Kenya shows Kenya’s total public debt hit Sh5.8 trillion in June, Sh2.78 trillion from local market and Sh3.02 trillion borrowed externally.

According to World Bank, Kenya’s debt service ratio is currently at 10.6 per cent, having doubled from a single digit of 5.3 per cent in 2013.

A collection of Sh107.4 billion in domestic revenue in July means, KRA is likely to collect only Sh1.28 trillion in the year if current trend persist, missing its 2019/20 target by almost Sh600 billion.

 

Meanwhile, the National Treasury statement shows the government spent Sh55.4 billion out of Sh1.05 trillion for the recurrent budget in July and Sh93.4 billion for development.

The ongoing standoff between members of the lower Parliament, executive, Senators and Governors on revenue allocation to counties so no amount disbursed to the devolved units during the month under review.

Generally, the government had a total revenue collection of Sh206.6 billion in July out of annual revenue collection target of Sh2.59 trillion.

Besides domestic revenue collection, the government received non tax income of Sh308.6 million and opening balance of Sh98.8 billion which constituted Sh97.3 billion from sovereign bonds sold in 2018/19.