Gov't spends Ksh.3.16B daily on debt repayments - Controller of Budget
A report by the Office of the Controller of Budget is painting a gloomy picture with statistics indicating that a whopping 83 per cent of all revenues collected by the government have been spent on debt repayment.
The Controller of Budget Margaret Nyakango, who appeared before the Budget and Appropriations Committee, stated that out of the Ksh.4.18 trillion budget in the 2022/23 Financial Year which heavily relies on Kenya Revenue Authority (KRA) collections, public debt was set to consume 83 percent of the revenues, leaving a paltry 17 percent for other government programs.
This means the government will still need to borrow more loans to sustain its operations.
"The debt as of 30th June is Ksh.10.25 trillion surpassing the legal limit," said Nyakango.
An 18 percent spike in public debt means the exchequer will have to dig deeper to raise funds to meet its obligations to settle the Ksh.5.42 trillion external debt and Ksh.4.83 trillion domestic debt.
While the Kenya Revenue Authority (KRA) is targeting to collect Ksh.2.7 trillion by the end of the 2023/24 financial year, the greater chunk of the collections would go into debt servicing.
Nyakango also took issue with public expenditure at both levels of government especially how recurrent expenditure continues to gobble up more public funds.
For instance, out of the Ksh.3.6 trillion allocated to the national government, 38 percent of the funds catered for salaries, allowances, contributions and wages of staff at the rate of Ksh.542.46 billion.
Foreign travel has also been flagged as a leading drainer of public funds. Despite a memo from the Head of Public Service limiting official travel for government officials, the Controller of Budget revealed that State officers consumed Ksh.20 billion in foreign and domestic travel.
The National Assembly emerged as the highest spender sinking Ksh. 4.8 billion into local travel and another Ksh.1.5 billion into foreign travel.
Hospitality too took up Ksh.8.6 billion with the Office of the President leading the pack by taking up 2.34 percent while the polls body IEBC came a close second spending Ksh.2.1 billion.
Despite President William Ruto's order to counties to settle approved pending bills so as to facilitate the circulation of monies and boost the economy, pending bills have instead risen to Ksh.727.74 billion from Ksh.685.62 billion. Under the prevailing circumstances, it is unlikely that the trend will change at any time.
Nyakango recommends that it is necessary to match existing loans with the project it funded to establish whether the country is getting value for money.
Another proposal that is likely to stir controversy was a suggestion that the National Treasury explores other currencies in seeking funds so as to minimise the pressure of the shilling which continues to depreciate by the day.
She further urged the government to cut its coat according to the size of its cloth.
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