Numbers that matter in today’s budget statement
With the budget being read today, the reality is in the figures that Treasury Cabinet Secretary Henry Rotich will be explaining to Kenyans.
From clarifying about the biggest budget the country has ever prepared, to convincing taxpayers on how the revenue that Kenya Revenue Authority (KRA) has collected will be used to service debts, it will be a tall order for Mr Rotich on a day that the national spotlight is on him.
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Rotich will be reading a staggering Sh3.07 trillion budget, the biggest ever tabled, having grown from Sh266 billion in the 2000/2001 financial year.
Of this, the lion’s share will go to the national government, which gets Sh1.7 trillion. The counties will get Sh372.7 billion.
Another figure that is significant is debt. According to the Central Bank of Kenya (CBK), the country’s public debt currently stands at Sh4.9 trillion.
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Of this, Sh870 billion – which includes interest and redemption payments – will be maturing and must be paid in the 2018/2019 financial year.
The debt repayments have grown by Sh221 billion since the last financial year.
According to a report by the National Assembly’s Budget and Appropriations Committee, the borrowing ratio for the 2018/2019 financial year has been set up to 50 per cent of the gross domestic product for external borrowing, and 50 per cent for domestic borrowing.
This is a revision from the 50 per cent of GDP for external borrowing and 43 per cent for domestic borrowing for the current year, which means the Government will rely more on domestic borrowing for the coming year.
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The third notable figure is the total revenue that is supposed to finance the budget. KRA is expected to collect Sh1.7 trillion in the next financial year.
State agencies will need to collect Sh180 billion through channels such as fees, licences and court fines, otherwise called Appropriation in Aid. Thus the total expected revenue is Sh1.9 trillion.
This comes even as the country’s fiscal deficit continues to be a big headache, standing at 8.9 per cent.
Also of importance is the amount that will be spent on recurrent expenditure.
This is the money that the Government uses to cater for its daily administrative costs, such as salaries and utility bills. The figure stands at Sh1 trillion.
When all this is done, the National Treasury has set aside Sh625 billion for development expenditure.
Why Rotich’s numbers are not adding up