The Treasury building in Nairobi. [ photo/the-star.co.ke]
The Treasury's borrowing at the Central Bank of Kenya rose to record the highest level since last year implying the increased cash demands as the poor revenue generation bites.
In the latest statistics, the government's overdraft shot up by Sh 6.86 billion to record Sh40.66 billion as of December 1 from Sh 33.88 billion recorded a week earlier.
The overdrafts share of the gross domestic debt also rose to record a fresh high of 1.8 per cent signifying the cash struggles experienced by the government since the beginning of the 2016/2017 fiscal year that led to the push of the domestic debt to a new Sh 2.23 trillion record.
According to the rules set by the CBK after the Goldenberg Scandal in the early 1990s, the state is restricted to only borrowing five per cent of the last audited accounts.
However, the Treasury's borrowing has reached nearly 3.75 per cent of Sh 1.085 trillion, the last audited accounts for the financial year 2014-15.As from April to the second week of August, the treasury had kept off the borrowing at CBK as it only lended twice in the weeks that ended on May 5 and June 2 when it borrowed Sh 2.7 billion and Sh30 million respectively.
However, the active borrowing began at the week that ended on August 11 through to December 1 with treasury recording an estimated weekly constant of Sh 23.54 billion in the overdraft in what was linked to aftermath of August 8 General Elections.
Cytonn Investments in this week’s market report revealed that the government was still behind the domestic borrowing target of Sh 181.4 billion as it had only borrowed Sh Sh 72.1 billion in 2017/2018 financial year.
“The government is still behind its domestic borrowing target for the current fiscal year, having borrowed Sh 72.1 billion, against a target of Sh 181.4 billion,” wrote Cytonn Investment's analyst at this weeks report.