Treasury building.[Photo/softkenya]

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National Treasury is set to raise commercial financing from foreign sources to Sh288 billion in the next fiscal year.

The amount will be Sh38 billion more than in the current Budget.

The plan is meant to drastically reduce the amount borrowed commercially from external sources to just Sh50 billion.

The plan will be rolled out in the next two fiscal years. 

This is part of a plan to gradually cut the budget deficit that had gone beyond 8.9 per cent in 2016/17.

According to the Budget Policy Statement 2018/19, the Treasury targets to cut the total budget deficit to 6.0 per cent in the next fiscal year, from 7.2 per cent in the current year, falling to 3.0 per cent in 2021/22.

The total spending is planned to rise by 7.1 per cent or Sh165 billion to Sh2.488 trillion in the next fiscal year.

“The lower deficit reflects the projected completion of key infrastructural projects being implemented by the Government, enhanced revenue collection and prudent public spending,” says the BPS.