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The Budget and Appropriations Committee chaired by Hon. Ndindi Nyoro (Kiharu) met with the National Treasury & Economic Planning Cabinet Secretary (CS)  Prof. Njuguna Ndung’u who appeared before the Committee to shed light on concerns in regard to the Financial Year 2023/24 Budget Estimates.

Members tasked the CS to explain the Government's plans to meet the debt obligations in FY 2023/24 including the repayment of the Eurobond among other debt redemptions measures, amid the country’s limited access to foreign financing.

In addition, the Committee sought to understand the specific strategies that will be used to revamp exports in order to enhance earnings and reduce reliance on foreign remittances as well as boost the dwindling forex reserves which are currently lower than the statutory four months of import cover.

Further, Members asked Prof. Ndung’u to explain the reasons for the allocation to the Equalization Fund for FY 2023/24 of Kshs. 7.9 billion falling short of the Kshs8.3 billion provided for in the Division of Revenue Act (2023).

Members also raised concerns about the strategies that the National Government intends to use on funding the Bottom-Up Economic Transformation Agenda (BETA) without reliance on donor funding.

In his response, Prof. Ndung’u said that the Government's options for debt obligations include liability management operations using alternative financing solutions to settle maturities, undertaking buybacks or a bond switch-exchange current bond with different longer tenor bonds in consultation with Sovereign Rating Agencies and through the Bilateral and multilateral concessional funding.

On revamping exports, the CS said, "the Government has adopted a value chain approach that will address the bottlenecks that impede the growth of exports and enhance the countries competitiveness as well as boost food production and ease pressure on the cost of living".

While explaining the allocation of Kshs. 7.9 billion to the Equalization Fund, Prof. Ndung’u stated that the budget for the Fund was calculated at 0.5 percent of the most recent audited ordinary revenues which was Kshs. 1,573.4 billion as reflected in the fiscal framework for FY 2019/20. He added that the figure used in the Division of Revenue Act of Kshs. 8.3 billion was based on the actual collection of Kshs. 1,673.7 billion was erroneous and overstated.

In view of the current constrained fiscal framework, Prof. Ndung’u informed the Committee that the Government will implement various revenue-enhancing measures to boost revenue collection, for instance, implementation of the National Tax Policy and finalizing the Medium Term Revenue Strategy for the period FY 2023/24 – 2026/27.

Hon. Nyoro in his closing remarks said that the Budget & Appropriations Committee will embark on report writing. The report will subsequently be tabled in the House for debate. 

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