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BUDGET DECIFIT

No more borrowing, we must curb our appetite

President Kenyatta also needs to ensure that the next Kenya Revenue Authority head will be a competent person who can improve tax collection

In Summary

•National Treasury Cabinet Secretary Henry Rotich wants the World Bank to give Kenya a Sh75 billion loan.

•President Kibaki ensured that Kenya's budget was almost funded 100 per cent by our own taxes; international borrowing was done with caution. 

National Treasury CS Henry Rotich. Photo/File
National Treasury CS Henry Rotich. Photo/File

For the first time in more than a decade, Kenya has gone to the World Bank for a loan to help plug the budget deficit.

National Treasury CS Henry Rotich wants Sh75 billion, raising concerns about the state of the economy.

Public debt is a subject in most macroeconomic outlook discussions. The World Bank and the IMF have raised concerns.

 
 

Rising government debt has been driven by among other things appetite for cash-intense infrastructural spending and a tax shortfall resulting in a widening deficit

President Mwai Kibaki managed the economy well. He ensured Kenya's budget was almost funded 100 per cent by our own taxes. International borrowing was undertaken with caution. 

While some argue the borrowed funds are channelled towards development spending on projects expected to eventually pay off by sparking faster economic growth, there has not been an increase in public debt to GDP resulting in increased GDP growth. 

President Uhuru Kenyatta, therefore, needs to ensure our budget deficit is within acceptable standards, our debts are paid promptly and no new projects are started until those in progress are completed.

He also needs to ensure the next KRA head will improve tax collection.

Quote of the Day: “The most difficult thing in the world is to know how to do a thing and to watch someone else do it wrong without comment.”

T H White

The English author was born on May 29, 1906.