Economic expert Billow Kerrow explains why President Ruto may raise public debt to Ksh12.4 trillion in his first term.
While appearing on Citizen TV’s Daybreak Show on January 25, economic expert Billow Kerrow explained how the unsustainable budget deficit will cause the debt to skyrocket.
Kenya currently has a public debt of Ksh8.6 trillion, and according to Billow, the government may need to borrow more than Ksh3.9 trillion in order to fund its budget.
“Kenya has had a constant deficit of 9 percent of its total budget, and the current government, through its proposed draft budget policy statement, has done nothing to avert that.
“There is an ambitious revenue target which will make it impossible to bring down the deficit,” Billow explained.
Billow remarked that the move contradicted Ruto’s pledge that the country would reduce external debt reliance.
“As a country, we would reduce public debt by not borrowing to finance recurrent expenditure in the future.
“The Treasury has my instructions to find at least Ksh300 billion in this year’s budget so that we can remove it,” Ruto promised Kenyans on September 22, 2022.
Billow explained that Ruto’s concerted efforts to reduce the country’s budget would not work as a way of reducing the public debt.
“The President has plans to spend above Ksh5 trillion in the next five years for his development agenda.
“Even with the ambitious revenue targets, the government has not come up with a strategy to reduce the crippling high expenditure,” Billow remarked.
He added that while Ruto’s administration tended to be more conservative when crafting the budget, the predicted Ksh12.4 trillion debt could really be exceeded.
“The government wants to increase its source of money. For the current fiscal year, which ends in June 2023, the target revenue collection is Ksh2.07 trillion, but we are already behind.
“What if we fail to meet those goals? What other choice will there be than to borrow more? “Blown” posed.