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BIG DILEMMA: Government running out of room to borrow, yet Kenya is still very broke

8th March, 2018

With revenues shrinking and the Government running out of room to borrow more to fund an expensive budget, Kenya is now instituting tough austerity measures. Treasury Cabinet Secretary Henry Rotich said yesterday senators needed to reduce county budgets by up to Sh18 billion as he prepares a second supplementary budget targeting national budget cuts of up to Sh60 billion.
He was speaking before the Senate Finance and Budget Committee, which wanted to know why Treasury had not released money to counties. No full share "If you were to tell us to disburse 100 per cent, the Judiciary, Executive and Parliament also want their full share and I can't get the revenues and you do not want me to touch borrowing, it's impossible. I mean something must give,” CS Rotich said. Treasury is tucked between a rock and a hard place and has resolved to cut the budget by over Sh80 billion for the first time as ambitious tax targets fall below expectations. Principal Secretary Kamau Thugge admitted that Kenya has hit its maximum stock of debt this year and needed to start climbing down.

 

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