The National Assembly's Public Debt and Privatization Committee chaired by  Hon. Abdi Shurie (Balambala) met with the Governor of the Central Bank of Kenya (CBK) Dr. Patrick Njoroge to discuss issues regarding the Consolidated Fund Services (CFS) Expenditures Estimates raised by the Auditor General in the Financial Year 2023/2024.

During the meeting, Dr. Njoroge informed the Committee that the performance of the Government's domestic borrowing programme is at 57 percent of the revised target of Kshs.434.9 billion for the Financial Year 2022/2023. Currently, a total of Kshs. 236 billion has been borrowed with only a few weeks remaining to the end of the Financial Year.

“Now that we cannot achieve the current target of Kshs. 434 billion, which means that there are certain programmes that need to be cut back and in turn lead to pending bills. This is the reason the pace of expenditure must be well-calibrated so that it matches the inflow of financing,” said Dr. Njoroge.

Further, the fiscal consolidation path over the medium term is expected to stabilize the rate of growth in public debt, with a projection of a reduction of the fiscal deficit from 8.2 percent in the Financial Year 2020/21 to 3.6 percent in 2025/2026.

Dr. Njoroge raised a concern about the sharp increase in borrowing targets in the recent past, with a peak in Financial Year 2021/2022 at Kshs.662.8 billion, while Financial Year 2023/2024 projects to borrow Kshs.533 billion, which he found quite ambitious with limited market capacity.

Further, the Governor highlighted certain measures that could be taken to mitigate the borrowing risks including exploring external financing options with an optimal mix of concessional and commercial funding, effective liquidity management, and dealing with concentration risks in the domestic debt market.