Yatani walks a tight rope in 2022/23 budget preparation

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Yatani walks a tight rope in 2022/23 budget preparation
Yatani walks a tight rope in 2022/23 budget preparation

Africa-PressKenya. National Treasury is considering major budget cuts in the next budget to tame Kenya’s ballooning debt.

Post-Covid economic recovery is also a key aspect in the budget planning process that started yesterday with colection of views from the public.

The budget will also have to address as President Uhuru Kenyatta’s Big Four Agenda that spills over to the next financial year.

The 2022/23 budget is estimated at Sh3.21 trillion but could be adjusted upwards or downwards.

For instance in the current financial year ending June 30, 2022, the spending had been projected at Sh3.02 trillion but final budget presented in Parliament rose to Sh3.6 trillion.

Among big spenders in the next financial year are expected to be education with a proposed allocation of Sh521 billion, energy, infrastructure and ICT (Sh357.7 billion), public administration and international development (Sh383.3 billion) and national security (Sh180.9 billion).

The national government will take up Sh2.04 trillion with the executive allocation projected at Sh1.98 trillion.

Allocation to counties is expected to remain at Sh370 billion.

Speaking at the opening of the public hearing of the financial year 2022-23 and the medium term budget proposals, National Treasury Cabinet Secretary Ukur Yatani said the government is cognisant of the public concerns about the high debt.

The country’s combined external and internal debt is currently at Sh7.7 trillion and according to the Central Bak of Kenya out of every Sh100 collected, Sh10 goes into debt repayment.

Yatani plans to reduce fiscal deficit to 5.7 per cent from 7.4 per cent in the current financial year, meaning the need for borrowing will go down.

Economic growth is projected to rebound to six per cent up from a projected average of five per cent this year, and a contraction of 0.3 per cent last year.

The growth is expected to be driven mainly by the service sector.

Re-opening of the economy is expected to increase ordinary revenues collected by KRA to a projected Sh2.14 trillion. This is up from the Sh1.78 trillion projected for the current financial year.

Yatani said the government will focus on measures to expand the revenue base while rationalising government operating expenditure.

“We cannot pretend to spend what we don’t have. We have to cut the coat according to our size,” the CS said.

Parliamentary Budget and Appropriations Committee chairman, Kanini Kega, said while the current budget is being formulated at a difficult time owing to the pandemic, Kenya has previously failed to have a realistic revenue projection.

“This has resulted to rising of public debt and a very constrained fiscal space. Public debt is the worst enemy to any country,” the Kieni MP said.

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