Parliament has tasked treasury an impossible target of cutting the budget to sh2 trillions over the next four years. The legislators were reacting to state controller’s report which indicated that more than Sh1.4 trillion almost half of the national budget would be used to service debt.
The country’s debt hit Sh5.27 trillion as of December 2018, which would put it at over 56 per cent of gross domestic product (GDP) having grown from Sh1.7 trillion in 2013. At the current levels, it would also mean that debt has surpassed the National Treasury’s limit of borrowing less than 50 per cent of GDP in net present value terms.
MPs also want to have a direct say on how much the Government borrows in a bid to tame the country’s appetite for loans. The legislators are alarmed by Government’s ambitious budget that hit Sh3 trillion in the 2018/19 financial year, having steadily grown from Sh1.2 trillion in 2013. A large part of the budget is financed through debt.
The Budget and Appropriations Committee recommended that Treasury pursues a smaller but more realistic budget such that the country lives within its means and borrow minimally The MPs now want Treasury to trim the budget for the next financial year by 22 per cent to Sh2.06 trillion, from earlier estimates of Sh2.6 trillion.