This archive report was first published on 15 June 2020.
Published on June 15, 2020, the International Budget Partnership warned that Kenya's treasury needs to renegotiate its debt servicing schedule and suspend investments in non-essential capital projects to avoid severe fiscal pressure.
According to the International Budget Partnership, Kenya's national budget has expanded from 1.3 trillion shillings in 2013/14 to an estimated 2.8 trillion in 2019/20, while revenue has only grown from 1.0 trillion to 1.6 trillion in the current fiscal year.
As a result, the fiscal deficit has widened from 300 billion shillings in 2013/14 to a projected 900 billion shillings, equivalent to 8.0 percent of GDP in 2019/20.
Abraham Muriu, Country Director of the International Budget Partnership, emphasized the need for the treasury to set realistic targets to reduce unnecessary deficits and focus on critical projects when borrowing.
Kenya's public debt level has increased significantly over the past five years, from 50.2 percent of GDP in 2015 to an estimated 61.7 percent of GDP in 2019, occasioning a yawning budget deficit projected at 7.3 percent of GDP in the current fiscal year.
Public debt repayments are expected to increase by 17.67 percent from 768.85 billion shillings in 2019/20 to 904.70 billion shillings in 2020/21, according to treasury estimates.
