This archive report was first published on 15 January 2020.
On January 15, 2020, Kenya's Treasury Cabinet Secretary Ukur Yatani announced plans to end the country's wide budget deficits, citing a need to boost inadequate revenue collection and minimize borrowing.
The move comes as the government has been criticized for borrowing heavily in recent years, with President Uhuru Kenyatta's administration forced to raise its borrowing ceiling last year after breaching the set level.
According to Yatani, the room for budget deficits, which have been above six percent of GDP in recent years, has long closed.
"The era that we kept on spending outside the budget when we don’t have the ability to finance our own activities is long gone," Yatani said at a meeting to prepare the government’s 2020/21 budget.
He emphasized the need for the government to "cut our coat according to our cloth and size" and give only what it can afford.
The fiscal deficits, which peaked at 9.1 percent of GDP in 2016/17 financial year, were driven by higher spending on infrastructure projects like a new railway financed by debt with China.
Yatani also acknowledged that people were disenchanted with the growth numbers, citing low prices for commodities and delays in payment of bills by the government as major concerns.
He warned local authorities, state firms, and government departments and agencies against delaying supplier payments, which have been blamed for a rise in loan defaults and job cuts.
