During a pre-budget reading media briefing at the National Treasury Building, National Treasury Principal Secretary Chris Kiptoo highlighted the country’s financial challenges, revealing that more than half of the national revenue is allocated to servicing debts.
Kiptoo emphasized the need for fiscal consolidation measures, emphasizing the importance of not only reducing borrowing but also cutting down on costs to address this issue. He underscored the impact of debt servicing on the budget, noting that for every 10 Kenyan Shillings received from the Kenya Revenue Authority (KRA), 6 Shillings are allocated to debt repayment.
This reality, he explained, leaves less funding available for critical areas such as infrastructure, education, and other development projects. Kiptoo emphasized the necessity of addressing low revenue levels to reduce the need for borrowing and alleviate the burden of debt servicing on the country’s finances.
“Continuing widening of deficit means we are taking more debts and taking more revenues in future and that means shrinking amount of money that can be used to fund roads, education and development,” the PS said.
Kiptoo said when the government is using more of its revenue on meeting recurrent expenditure, the impact of development would not be much in all sectors.
“We must really live within our means, there is no room for blame, the reality is that this is where we are because we have taken more than we can afford,” he said.
“We are saying let’s reduce over the medium term through a fiscal consolidation, we may wish to run a balanced budget but we can’t do that at once,” he said.
National Treasury Cabinet Secretary Njuguna Ndung’u will on Thursday afternoon read the 2024/25 budget estimates during a joint sitting of the Senate and National Assembly.
