This archive report was first published on 17 September 2019.
Published on September 17, 2019, the National Treasury has trimmed the spending projection for the 2020/2021 financial year with deep cuts in the development expenditure in a bid to reduce the budget deficit.
The data projects a Sh2.7 trillion budget for the next financial year, with Sh1.8 trillion targeted for recurrent expenditure and Sh550 billion for development. This is Sh89 billion lower than the budget laid out by suspended Treasury Cabinet Secretary Henry Rotich for the current financial year and also marks a Sh160 billion cut in development expenditure.
According to Treasury principal secretary Julius Muia, the fiscal deficit has been projected at Sh584 billion that will be financed through Sh211 billion from the external market and Sh369 billion from the domestic market.
As part of the austerity measures, the Government will prioritize spending on ongoing projects and those aligned to the Big Four agenda as a means of spurring economic growth. However, the Sh160 billion cuts in development expenditure and a Sh73 billion increase in recurrent spend pours cold water on the Government’s commitment to austerity.
The country’s public debt is set to hit Sh6 trillion by the end of this financial year, up from Sh5 trillion as of June last year.
