Treasury CS Henry Rotich during a past media briefing. [Photo: treasury/twitter.com]
The national government has drafted a plan that will see it reduce spending in order to cut on the ever-increasing public debt.
The public debt stood at Sh.4.48 trillion in September last year, up from Sh3.5 trillion in March 2015 and Sh2.1 trillion in November 2013.
Treasury Cabinet Secretary Henry Rotich said in a draft budget policy seen by Reuters that the government is aware of the fiscal situation it is currently in, and therefore has to reduce the amount being spent in order to service the deficit in the Kenyan budget.
“We are clearly conscious of our limited fiscal space. In the current financial year, the treasury will pay Sh658.2 billion for loans,” the Cabinet Secretary said in the statement.
The data also shows that for every Sh10 that the government collects through the Kenya Revenue Authority (KRA), Sh4.50 will be spent on servicing of loans leaving very little for development.
Infrastructural development has been one of the great pillars of President Uhuru Kenyatta’s first term in office which has seen the government heavily borrow from the Chinese government to finance the infrastructural development in the country including the Standard Gauge Railway (SGR).