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Blog: Treasury CS reveals how much gov't will borrow to finance 2024/25 budget

Minute by minute updates of the presentation of the Financial Year 2024/25 budget

Cabinet Secretary for the National Treasury and Economic Planning Njuguna Ndung'u.

President William Ruto chaired a Cabinet meeting at State House, Nairobi, earlier today.

This meeting was a precursor to the presentation of the Sh4 trillion Financial Year 2024/25 budget, set to be delivered in Parliament by the Cabinet Secretary for the National Treasury and Economic Planning Njuguna Ndung'u.

The budget is in line with the government's move to reduce government borrowing, and in pursuit of the aspiration to achieve a balanced budget by 2027.

The proposed budget reduces the budget deficit by nearly 50%.

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In the 2021/22 budget the deficit was Sh1 trillion, Sh925 billion in FY 2023/24 and now Sh597 billion in FY 2024/25.

The budget policy, detailed later in the day, aims to accelerate the implementation of various policies, programs, and projects outlined in the administration's Blueprint - the Bottom-Up Economic Transformation Agenda (BETA). Key highlights include:

  1. Economic and Social Rights: Advancing universal health coverage, freedom from hunger, education, clean water, and sanitation.
  2. Infrastructure Development: Allocating additional resources to facilitate ongoing infrastructure projects.
  3. Export-led Growth: Positioning the economy for growth by supporting export-oriented sectors.
  4. Equitable Development: Promoting inclusive growth through enhanced allocations to County Governments, which now stand at a record Sh400.1 billion.
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14:18

Treasury Cabinet Secretary Njuguna Ndung'u leaves the National Treasury building heading to Parliament to present President Ruto's 2nd budget for the Financial Year 2024/25

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14:29

CS Njuguna Ndung'u received in Parliament by National Assembly Majority Leader Kimani Ichung'wa

14:00

Police tackle man who suddenly interrupted photo session outside Treasury ahead of Budget reading at Parliament

15:16

Governor Dr. Kamau Thugge is at the National Assembly for the presentation of the Budget Statement for FY2024/2025. Earlier, he was at the National Treasury where he joined the Cabinet Secretary, Principal Secretaries and other officials.

15:16

 CS Njuguna: The FY2024/25 and the Medium-Term Budget has been formulated against an improving economic outlook, albeit a slow growth recovery among economic sectors and regions.

15:37

CS Njuguna: the budget priorities are; Agriculture, MSMEs, Universal Health Coverage, affordable housing, digital superhighway

15:36

The government plans to scale up critical infrastructure such as roads, waterways, air transport and connectivity

15:32

CS Njuguna: We have one major problem that has 3 phases. 

  1. There is increased demand for increased spending or expenditures from the government which means that either we have to finance that through taxes or debt.
  2. There is limitation and even constraints imposed in terms of public debt accumulation and even the debt-carrying capacity of the economy. 
  3. There are limitations in terms of mobilizing higher tax revenues
15:41

CS Njuguna: In February this year, the government took advantage of the improved international financial market conditions to refinance the buy back of $1.5 billion of the Eurobond 2024. The government through this process successfully removed the uncertainty of the settlement of Eurobond.

15:43

CS Njuguna: The government also successfully issued an 8 and a half year infrastructure bond that attracted significant foreign investors making it the most successful domestic bond issuance in the country's history

15:44

CS Njuguna: In 2023, the total new jobs generated in the economy increased to 848,200 jobs compared to 816,600 new jobs generated in 2022 and this is attributable to policies implemented especially when you focus on affordable housing and agricultural sector interventions.

15:48

The government is facing 94,997 pending bills valued at Sh663 billion.  An analysis of claims is ongoing, and committee is expected to complete work by October 2024 for implementation within the fiscal framework

15:54

CS Njuguna: The public sector wage bill stood at 38.2% as a ratio of total revenue in 2021. To contain the wage bill, government implemented a wage freeze in the financial years 2021-2023 in addition to eliminating and streamlining the number of allowances

16:10

CS Njuguna: The Central Bank of Kenya to increase minimum core capital for banks from Sh1 billion to Sh10 billion. CBK to advise on timetable of implementation

16:10

CS Njuguna: Government to suspend the the permission given to Semi-Autonomous Government Agencies (SAGAS) to invest surplus money and have them surrender the funds to the Treasury.

16:11

Government proposes an additional Sh5 billion to the Financial Inclusion Fund dubbed Hustler Fund in the 2024/25 Financial Year

16:21

Government projects economy to grow at 5.5pc in FY24/25, supported by ongoing interventions under Bottom-Up Economic Agenda

16:25

Prof Njuguna Ndung’u: In order to move towards a balanced budget and further improve efficiency in public spending the following bold actions have been outlined: 

  1. Curtailing spending on foreign travel, rationalization of all training expenses across government and restricting all training to within government institutions.
  2. Rationalising all purchases of motor vehicles and suspending purchases of furniture for a period of 1 year and suspending all refurbishments and partitioning of government offices
16:31

Prof Njuguna Ndung’u: We project total revenue collections to be Sh343.2 billion equivalent to 18.5% of GDP.

Total expenditure in the financial year 2024-2025 budget is projected at Sh392 billion.

The fiscal deficit for 2024-2025 will be financed by net external borrowing of Sh333.8 billion and net domestic borrowing of 263.2 billion. Kenya meets its obligations promptly and no debt arrears have been accumulated.

16:35

Government is set to borrow Sh263 billion from domestic market with Sh333 billion projected in foreign debt

16:38

The government will roll out a unified HR information system for the entire public sector starting July 1, 2024

16:42

Treasury proposes an allocation of
Sh92.1 billion for housing urban development and public works
Sh8.3 billion for Kenyan urban programme

Sh3 billion for Kenya Mortgage Refinance Company for enhancement of capital and lending

Sh32.5 billion for construction of affordable housing units

Sh15 billion for construction of social housing units

Sh14.7 billion for social and physical infrastructure

16:45

Treasury proposes an allocation of Sh1.1 billion to strengthen cancer management at KNH, Sh3.7 billion for medical interns, Sh406 million for training of health personnel.

16:54

CS Njuguna Ndung'u proposes an allocation of Sh54.6 billion to the Agricultural sector

16:56

Treasury proposes Sh173.1 billion allocation for the security sector;

  1. Sh110.6 billion for the National Police Service
  2. Sh46.3 for NIS
  3. Sh32.7b for the Prisons Dept 
  4. Sh13.9b for leasing police vehicles 
  5. Sh918.4m for equipping the DCI forensic lab
16:58

Micro, Small and Medium Enterprises budget allocation:

  1. Hustler Fund – Sh5 billion
  2. Youth Enterprise Development Fund – Sh200 million
  3. Centre for Entrepreneurship Project – Sh162.5 million
  4. Rural Kenya Financial Inclusion Facility – Sh1.9 billion
16:42

Treasury proposes allocation of Sh23.8 billion towards institutions mandated to fight corruption in the country.

16:43

Treasury has proposed a hiring freeze, suspension of refurbishment of State offices and furniture purchases for a year to slash public spending.

17:05

Treasury proposes Sh656 billion allocation to the education sector up from Sh628.6 billion last year

  1. Sh358.2 billion set aside for TSC 
  2. Sh142.3 billion for basic education
17:06

Treasury proposes Sh200 million for acquisition of ferries for use on Lake Victoria.

17:13

 To support tourism, sports, culture and recreation Treasury has proposed an allocation Sh23.7 billion

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