𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆, 𝗙𝗲𝗯𝗿𝘂𝗮𝗿𝘆 𝟮𝟮, 𝟮𝟬𝟮𝟰

 The Public Debt and Privatization Committee Chaired by Hon. Abdi Shurie (Balambala), continued receiving submissions on the 2024 Medium-Term Debt Management Strategy (MTDS) from more stakeholders.

  While appearing before the Committee, the Controller of Budget (CoB), Dr. Margaret Nyakang'o, warned that the double tragedy of the rising interest rates and the steep depreciation of the shilling is increasing our debt servicing burden to unmanageable levels.

 The CoB noted that the continued rise in debt service costs will leave the Government with limited funds for other necessary expenditures. She proposed rationalization of spending while growing revenues, as a sure way of evading the debt trap.

 In addition to that, the CoB stated that Kenya's budget deficit and debt crisis stem from the Government's persistent overspending, and non-core spending priorities; citing the need to alleviate the wastage of public funds. 

  "There is a need to limit the budget to necessary expenditures. Kenya's fiscal gap will keep widening and eventually have a hard landing," Dr. Nyakang'o said.

  The International Budget Partnership (IBP) Kenya, led by their Executive Director, Dr. Abraham Muriu, welcomed the Budget Policy Statement (BPS) 2024 proposal to decrease the fiscal deficit, excluding grants, from Kshs.761 billion, to Kshs.753 billion. 

 Dr. Muriu however noted that historically, the achievement of this target has been affected by in-year increases in expenditure and underperformance of revenue. 

  "Given the underperformance in revenue in FY 2023/24, the size of the deficit is likely to increase within the year, which is not encouraging for the fidelity of the National Government to the proposed deficit in FY 2024/250," he said.

  The Institute of Public Finance (IPF) CEO, Mr. James Muraguri, in his submission, supported the MTDS strategy on minimizing refinancing risk by lengthening the total portfolio Average Time to Maturity, through the issuance of medium to long-term bonds and concessional loans, with longer maturities. 

  "IPF recommends that new debts contracted for FY 2024/25 and the Medium-Term, be pegged on a longer maturity period. The MTDS should strive to attain pre-covid repayment periods, which averaged 9 years for domestic and 10 years for external debts," Said Mr. Muraguri.