Fiscal consolidation with the aim of bolstering the country’s debt sustainability position is the hallmark of this year’s national budget policy statement that is awaiting feedback from stakeholders and the public.
Among other agendas, this year’s national budget will prioritize public investments geared towards realization of the government’s big four plan namely supporting value addition in the manufacturing sector, food security and improved nutrition, Universal Health Coverage and provision of affordable housing.
It will look in to fiscal consolidation in order to reduce deficits and accumulation of debt stock.
The current account deficit is projected to be lower this year based on among others reduced importation of food and SGR equipment as well as steady growth in tea and horticulture exports, strong Diaspora remittances, and continued growth in receipts from tourism.
However, the draft budget policy statement predicts a fiscal deficit of 639 billion shillings equivalent to 6.5 percent of GDP.
The national treasury plans to finance the deficit through net external financing of 214.7 billion shillings, net domestic borrowing of 369.6 billion shillings and other net domestic receipts of 4.2 billion shillings, which is still 50.5 billion shillings less when compared to last year’s budget deficit.
The treasury expects KRA to collect 1.8 trillion shillings, which is about 200 billion shillings more than what is projected to be collected in the current financial year.
This will be supported by ongoing reforms in tax policy and revenue administration. Treasury plans an overall expenditure and net lending of 2.4 trillion shillings equivalent to 25.4 percent of the GDP surpassing the targeted revenue collection by 639 billion shillings.
Among other agendas, the budget prioritizes public investments geared towards realization of the government’s big four plan namely supporting value addition in the manufacturing sector, food security and improved nutrition by the year 2022, Universal Health Coverage and provision of affordable housing by construction of at least five hundred thousand houses by the year 2022.
To this end, National Treasury has been taking views from the public whose deadline for submission is the end of the day today to enable it finalize the document for onward submission to the Cabinet then to Parliament.