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Treasury trims upcoming budget by Ksh 273B

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The National Treasury has slashed Ksh 273 billion from the draft 2024/2025 budget that is now at Ksh 3.9 trillion.

Churchill Ogutu, an economist at IC group has welcomed the reduction, but fears this could affect key sectors such as education, infrastructure and defence.

The reduction is being attributed to revenue shortfalls and liquidity constraints.

Allocation to the executive has been slashed by Ksh 240 billion to Ksh 2.24 trillion while allocations to parliament and judiciary have been maintained.

The National Treasury has also reviewed downward the taxman revenue estimates by Ksh 81 billion, from Kwh 3.43 trillion to Ksh 3.35 trillion where ordinary revenue is projected to fall to Ksh 2.91 trillion from Ksh 2.94 trillion.

Ogutu however believes the revenue collections target given to KRA is high given the prevailing economic conditions

Following the revision of the fiscal framework , development expenditure is set to take the hardest hit as expenditure plan has been cut from the planned Ksh 877.8 billion to Ksh 687.9 billion.

Recurrent expenditure including wages and salaries and interest payments, has also been reduced from Ksh 2.85 trillion to Ksh 2.78 trillion.

This as the government targets to reduce the fiscal deficit by 2.9pc of GDP for 2024/25 fiscal year to Ksh 514.7 billion from Ksh 703 billion.

Collections from ministerial appropriation aid has also been revised from Ksh 486.9 billion to Ksh 441 billion.

Caroline Njenga
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