Rather than enacting the controversial Finance Bill 2024’s proposed Ksh346 billion increase, President William Ruto has decided to borrow Ksh169 billion.
President Ruto emphasized that this action will support the government’s plan to lessen financial strain while preserving vital services in a national address on Friday, July 7.
Ruto also revealed that a committee would be established by the government to carry out a comprehensive forensic audit of the nation’s debt. It is anticipated that this committee, which has not yet been appointed, will present its findings in three months.
“This audit will give Kenyans clarity on the amount and kind of debt, how public resources were used, and will make recommendations for managing our public debt in a way that is equitable for all generations and sustainable,” stated Ruto.
The National Treasury first considered two options: either borrow Ksh346 billion in full or make universal budget cuts equal to the entire amount. In the end, it was decided to borrow the remaining amount and cut the budget by Ksh177 billion.
“According to our analysis, fully withdrawing this amount would have a detrimental effect on essential government services, and taking out a full loan would increase our fiscal deficit and possibly cause instability in areas like interest rates and exchange rates,” stated President Ruto
By Newsmedia