- KRA collected Sh593.14 billion in four months, representing 34.7 per cent of the total target of Sh1.70 trillion.
- Counties, on the other hand, received Sh92.49 billion over the period, translating to 10.3 per cent of the total Exchequer issues
The Treasury spent an average of Sh2.7 billion per day in the last four months in repaying debts, exposing the country’s worsening borrowing crisis.
The repayment is almost four times the amount sent to the counties and more than three times the cash spent on development over the period.
According the national government cash releases status report exclusively obtained by the Star, the Treasury spent Sh323.16 billion on meeting debt obligations between July 1 and October 30.
This translates to 35.9 per cent of the total Exchequer issues released by the Treasury.
The expenditure on debt represents 54.48 per cent of the ordinary revenue (revenue collected by the Kenya Revenue Authority) raised over the period.
KRA collected Sh593 billion in four months, representing 34.7 per cent of the total target of Sh1.70 trillion.
Counties, on the other hand, have received Sh92.49 billion over the period, translating to 10.3 per cent of the total Exchequer issues.
The heavy spending on debt has affected development, with the Treasury spending Sh389.22 billion.
Expenditure on recurrent expenses, such as payments of salaries, gobbled the highest amount over the period, taking up 343.20 billion.
The public debt stock stands at about Sh7.7 trillion.
In September, Controller of Budget Margaret Nyakang’o revealed the country’s debt had hit an all-time high, with the government forced to borrow from wealthy Kenyans and moneyed companies to pay debt.
So heavy is the debt that the government was unable to service the loans from its ordinary revenue and at the same time meet other obligations, including development.
The report also showed the government has opted to borrow from international lenders and other non-bank entities to repay debt.
“At a best practice, the government should not borrow to repay loans,” Nyakang'o told a Senate committee.
According to a report tabled in Parliament last month, the Treasury secured 10 loans worth Sh293.5 billion between April 1 and August 30.
This translates to about Sh2.4 billion borrowed per day in the four months. The loans were taken from bilateral, commercial and multilateral creditors.
“Seven of the loans are from multilateral lenders, two from bilateral lenders and one from international sovereign bond," the report says.
In September, Central Bank of Kenya Governor Patrick Njoroge called for immediate action to manage the ballooning debt lest it bring down the economy.
The Commission on Revenue Allocation accused Parliament of abetting the heavy borrowing by the National Treasury.
“Parliament plays a critical role in the approval of the budget and this is where vigilance is required to ensure fiscal deficits are sustainable at the budget approval stage,” CRA chairperson Jane Kiringai said.
Kiringai said Parliament needs to set the bar for transparency and debt management, interrogate Treasury’s annual borrowing plans and interest rates at which the government is borrowing.
Parliament should also interrogate the use of the loans, she said.
In the current financial year, debt repayment is budgeted at Sh1.16 trillion or 36 per cent of the total allocations. This is the highest component of the budget.
Other components are;recurrent at Sh1.10 trillion (34.7 per cent), development at Sh389.22 billion (12.2 per cent), pensions and gratuities at Sh153.63 billion (4.8 per cent).
County governments were allocated Sh370 billion (11.6 per cent) and salaries, allowances and maintenance at Sh4.41 billion or 0.1 per cent.
In the last fiscal year, the government borrowed Sh1.20 trillion, representing 90.9 per cent of the targeted borrowing for the year.
Edited by EKibii