Central Bank of Kenya (CBK) Governor, Dr Patrick Njoroge, has clarified reports that the government has only about Sh93 million at Treasury.
Does Treasury have only Sh93 million left? CBK Governor answers
The CBK governor also explained why many Kenyans are struggling to make ends meet despite the country’s economy registering growth
Governor Njoroge was answering questions from MPs during their induction at the Safari Park Hotel in Nairobi on Monday.
The allegations on the National Treasury’s balances were fuelled by MPs who claimed that the previous regime was to blame for the government’s cash crunch.
"The government is required to public the cash flow every month. The point is that it shows how much came in, how much was spent and how much remained," the CBK governor explained.
He added: "The fact that it is Sh93 million in my case is neither here nor there because there may be expenditures that were needed that were maybe held back in terms of pending bills. This table doesn't give you a complete picture but I think it tells you that the government had certain expenditures, it got certain flows including loans and it paid those expeditures and the balance was the Sh93 million."
Governor Njoroge also explained why many Kenyans are struggling to make ends meet despite the country’s economy registering growth in the gross domestic product (GDP).
Economists define GDP as the most commonly used measure for the size of an economy, which Governor Njoroge said resulted in a false perception of the true nature of an economy.
“In the first quarter of this year, the economy grew at 6.8% and were expecting that this year we’ll grow at 5.4% which is a strong growth relative to other countries.
“It is not GDP that people are interested in. These incomes that are measured here, are they helping people? That is the big question,” Njoroge explained.
He blamed the irony on income and wealth inequality in the country which was aggravated by the effects of Covid-19 on the economy.
“Even we as economists get excited about the growth rate and charts at the end of the day it is what do I take home? GDP is the income for all of us, the entire country.
“We could say that a section is getting a bigger share of the cake and this other one is not getting much,” he said giving an example of Kenyans who made large sums of money while others lost their businesses and incomes.
The CBK governor also addressed concerns about the low performance of Kenya’s currency against the dollar.
He explained that the movement was not alarming, attributing the observation to the strength of the US currency.
“Basically the US dollar has been strengthening dramatically against all other currencies. The US dollar is on one side and everyone else is going down,” he said.
He however said that the CBK had succeeded in stabilising the shilling to prevent radical loss of value and dramatic gains.
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