Njuguna Ndung'u inaugural budget: All eyes on Ruto's moneyman
National
By
David Njaaga
| Jun 15, 2023
Treasury Cabinet Secretary Prof Njuguna Ndung'u is the man of the moment, quite literally.
At exactly 2.30pm today, all eyes will be on the CS as he is expected to deliver his first budget in the Kenya Kwanza government.
Ndung'u has set a realistic preview of the upcoming budget with an estimate of Sh3.6 trillion, scheduled to be presented on Thursday afternoon at Parliament, Nairobi.
The budget, for the fiscal year 2023/24, will be the largest and the first under the administration of President William Ruto, showing a significant increase of Sh300 billion compared to the previous estimates of Sh3.3 trillion during former President Uhuru Kenyatta's tenure.
Speaking in an interview with Citizen TV, Ndung'u acknowledged the economic challenges faced by the country and stressed the need for tough decisions, particularly on taxation.
"The new administration inherited an economy burdened by multiple shocks, including escalating living costs and the consequences of climate change, which have adversely affected food security and the overall cost of living," he said.
Ndung'u emphasised that the budget's objectives are centered around revitalizing the economy, promoting inclusive growth, generating employment opportunities, and reducing living expenses.
"The budget reflects extensive consultations and incorporates measures to sustain inclusive growth outcomes," said Ndung'u.
In addition, the Treasury CS identified internal and external factors that have contributed to the increase in tax revenue collection under President Ruto's administration.
These factors, he said, are persistent drought, the conflict in Ukraine, and global economic shocks.
"Despite the challenging economic circumstances, which include the ongoing pandemic, supply-side disruptions, high energy costs resulting from the Ukrainian crisis, and an unprecedented drought, we remain committed to raising the tax revenue ratio to the country's Gross Domestic Product (GDP)," he added.
The ratio had declined from 22 per cent to 13 per cent during the previous administration.
Kenyans eagerly anticipate how Ndungu's budget will address their expectations, particularly in terms of alleviating the already high cost of living.
Notably, the budget proposals outline allocations of Sh1.4 trillion for recurrent expenditure, with Sh714 billion designated for development expenditure. A budget deficit of Sh720 billion is also estimated.
Moreover, it is expected that approximately Sh2.16 trillion will be channeled to the National Government, while Sh385.4 billion is allocated to County Governments.
The Parliament is projected to receive Sh40.4 billion, with the Judiciary receiving Sh22.99 billion.
The current national debt stands at Sh9.6 trillion, leaving the government with a borrowing window of only Sh400 billion against a Sh720 billion deficit.
In terms of taxation, there have been some adjustments made in the budget proposals.
The initial 15 per cent excise duty on mobile money transfers has been reduced to 12 per cent, and a new 5 per cent withholding tax on digital content monetization has been introduced, down from the previously proposed 15 per cent.