This archive report was first published on 20 September 2019.
On September 19, 2019, the Kenyan government released a draft Treasury budget review, marking the first step towards cutting excessive government spending and reducing a gaping fiscal deficit. The move comes as the government faces criticism for ramping up borrowing since President Uhuru Kenyatta took office in 2013.
According to the budget review, the government plans to cut its spending for the 2019/20 fiscal year by 2.1%, equivalent to Sh46.2 billion. The cuts are aimed mainly at non-essential items such as foreign travel by officials.
The government has defended its higher borrowing, saying it is required to fund infrastructure. However, critics argue that the government is saddling future generations with too much debt. The total public debt stands at 55% of GDP, up from 42% when President Kenyatta took office.
Analysts say the cuts do not go far enough, with some calling for substantive spending cuts alongside big revenue measures. The government aims to cut the fiscal deficit to about 3.5% of economic output by the 2022/23 financial year.
Pressure on the government's finances has been exacerbated by the creation of 47 new local authorities in 2013, which operate their own budgets. The government has also been criticized for failing to stamp out widespread corruption, with hundreds of billions of shillings in government funds lost every year.
