Kenya: Yatani Walks Tightrope With Sh3.6 Trillion Budget Amid Covid-19

Sumary of Kenya: Yatani Walks Tightrope With Sh3.6 Trillion Budget Amid Covid-19:

  • The economist has to find money from a thin resource envelope hard hit by the economically devastating Covid-19 pandemic..
  • In between, he also has to ensure he delivers on the promises made to the International Monetary Fund (IMF), that include increasing tax collections that can only be achieved by growing the economy, raising taxes or catching tax cheats..
  • At the back of his mind will be the ticking clock of debt repayment schedules including the Eurobond and the Standard Gauge Railway (SGR) loans among others, and the urgent need to protect the country from slipping into pariah list of defaulting nations..
  • An analysis of the Consolidated Fund Services (CFS), the kitty from which debt repayments and salaries for constitutional commissions are drawn, paints the picture of a government that plans to spend more money on repaying debt than anything else..
  • In the new financial year, CFS expenditures will increase by 24 percent to Sh1.33 trillion, which is a rise of Sh253.5 billion..
  • “The annualised growth rate is 20 percent, which is much higher than the nominal GDP growth rate for the same period,”.
  • By the end of March 2021, the Public and Publicly Guaranteed Stock of debt amounted to Sh7.34 trillion, representing 82 percent of the Sh9 trillion national debt ceiling..
  • “The Committee is concerned that FY 2021/22 budget may not be implementable if the debt ceiling is not adjusted,”…

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