Kenya's 2020/21 budget deficit likely to swell - CS Yatani

The loan will be the third from the World Bank.

In Summary

•Ukur Yatani, who set the deficit at 7.5% of GDP when he presented the budget in June, said the additional gap will be covered by some expenditure cuts and dividends from state-owned firms.

•He did not say how far the gap was likely to expand.

Treasury Cabinet Secretary Ukur Yattani
Treasury Cabinet Secretary Ukur Yattani

Kenya’s budget deficit for the 2020/21 financial year (July-June) could increase due to revenue shortfalls and coronavirus-related disruptions, the finance minister said on Tuesday.

Ukur Yatani, who set the deficit at 7.5% of GDP when he presented the budget in June, said the additional gap will be covered by some expenditure cuts and dividends from state-owned firms. He did not say how far the gap was likely to expand.

Revenue collection underperformed by 40 billion shillings ($368.49 million) in the first two months of the financial year, July and August, Yatani said, adding that he will present a supplementary budget in December or January.

 

The government was in early talks with the World Bank, for the provision of an additional budgetary support loan, which was potentially going to be used in the 2021/22 fiscal year, the minister told Reuters.

The loan will be the third from the World Bank after the Washington-based lender started issuing such financing to the East African nation last year, saying the reforms carried out by the government so far had made it qualify.