2020 2021 Fiscal Year: The shocking borrowing spree that has characterized the government of President Uhuru Kenyatta reached astonishing levels last year. According to a report that appeared in The Star newspaper on Monday, the government borrowed an average of Sh. 3.37 billion.
This report, which was drawn from the 2020-21 half-year budget implementation review by Controller of Budget Margaret Nyakango, shows that the government borrowed Sh.1.23 trillion between December 30, 2019 and December 30, 2020.
“This pushed the country’s debt to Sh. 7.28 trillion from Sh. 6.05 trillion, an increase of 20.5 per cent in a span of just one year,” the report in The Star said.
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According to the report released by Nyakango’s office, the huge debt has resulted in nearly 50 per cent of revenues going towards repayments. Between July 1 and December 31, 2020, the government spent Sh. 350.32 billion in debt repayment. This represented 38.7 per cent of the gross estimates and 48.2 per cent of the ordinary revenue collected by the Kenya Revenue Authority.
“This expenditure exceeded that on development programmes, which stood at Sh. 230.89 billion during the period,” the report said. “Increased public borrowing may result in undesirable fiscal consequences such as high interest rates, inflation and overburdening of future generations.”
The National Treasury has already indicated it intends to borrow some Sh. 930 billion next fiscal year to plug the projected budget deficit. Currently, the National Treasury is planning to float yet another Eurobond to raise some Sh. 134 billion to finance government operations and pay salaries. 2020 2021 Fiscal Year.
