National Treasury in race to collect Sh1.3trn in two months
3 min read
Treasury in race to collect Sh1.3trn in two months in order to meet its target of Sh3.612 trillion by June
Treasury in race to collect Sh1.3trn in two months in order to meet its target of Sh3.612 trillion by June.
As the latest data provides a glimpse into the financial crisis President William Ruto’s administration is facing, the National Treasury is under pressure to mobilize nearly Sh1.3 trillion in only two months if it is to meet its spending commitments for the financial year running through June 30.
The exchequer may be obliged to make last-minute budget cuts or to postpone some expenses until the new 2023–24 fiscal year as a result of the fiscal restrictions, which have been reflected by missed targets in tax revenues and borrowing.
According to the most recent data from the Treasury summary of actual revenues and net exchequer issues as of April 28, which was published last week, total receipts after ten months were Sh2.325 trillion, against a target of Sh3.612 trillion by June.
This means that the exchequer has to mobilize some Sh1.286 trillion to close the gap within this month and in June.
The exchequer, for instance, faces the pressure of raising Sh535.1 billion in tax revenues in just 61 days, Sh479.9 billion from domestic borrowing, including provisions for debt rollovers, and Sh256.15 billion from external loans and grants.
Tax revenues are widely expected to fall shy of the mark based on historical trends where the Kenya Revenue Authority (KRA) is yet to mobilize at least Sh200 billion in any given month.
Expected financing, which includes an estimated Sh136.9 billion ($1 billion) from the World Bank and inflows from the fifth review of the International Monetary Fund (IMF) Extended Credit Facility and the Extended Fund Facility is, however, expected to cushion flows from external financing and grants.
Intrigues behind the sacking of Health PS and entire KEMSA board revealed
Matatu owners announce fare hike countrywide after fuel price increase
Ruto changes tune on Ksh.300 cheaper cooking gas “not possible”
More pain as EPRA increases fuel prices
Analysts say the government now stares at wide misses on fiscal targets without further recourse in the form of further budget rationalization and spending cuts.
“The government finds itself in a complex situation as to how it raises and spends funds in the last two months. I think this is asking too much and tees up the odds of a wide miss on fiscal targets,” Churchill Ogutu, an economist at IC Asset Managers, told the Business Daily.
The National Treasury is obligated to make disbursements of Sh1.295 trillion across the two months with the largest spending representing repayments on public debt at Sh484.3 billion.
Scheduled disbursements to recurrent spending meanwhile stand at Sh360.16 billion, Sh213.75 billion for development spending, and Sh123.95 billion in disbursements to counties under the equitable share of resources.
Also read,
Fuel prices to hit Ksh 200 per litre if parliament approves Ruto’s 16pc VAT
Kenya’s grand plan to expand SGR to Kisumu, Malaba, and Isiolo at a cost of KSh2.1 trillion
Safaricom set to offer interest-free loans for shopping
Follow us
