NAIROBI, Kenya, Aug 18 – The National Treasury expects Kenya’s total revenue to increase as the state seeks to cut overreliance on debt to fund its budget.
Treasury Cabinet Secretary (CS) Njuguna Ndung’u says the country’s total revenue will improve gradually to reach 18.3 percent of the gross domestic product (GDP) in the 2024/25 fiscal year (FY).
The government will be looking to increase revenue from the previous FY that ended June 30, 2023.
In FY 2022/23, the state collected Sh2.36 trillion, representing 16.3 percent of the GDP.
“Total Revenue will be expected to improve gradually to reach 18.3percent of the GDP in FY 2024/25 and higher over the medium-term,” Ndung’u said at the launch of FY 2024/25 and the Medium-term Budget Preparation Process at the Kenya School of Monetary Studies in Nairobi.
Ndung’u added that the government will also look at raising taxe collecion to increase revenue in subsequent budget.
He added that the Kenya Kwanza administration has been able to slash the fiscal deficit to GDP by 5.3 percent by June and is looking to drop the percentage to 4.4 percent by June next year.
“This will be supported by enhanced revenue mobilization, reprioritization and rationalization of expenditures but above all grow the tax base through an appropriate tax regime,” the CS stated.
“This will ultimately reduce public debt and create fiscal space over the medium term to finance priority capital projects.”
After being sworn in in September last year, President Ruto pledged to cut government expenditure by Sh300 billion with the aim to limit external borrowing and reducing Kenya’s public debt.
Kenya’s public debt crossed the Sh9 trillion mark for the first time in December, pushing the country closer to hitting the Sh10 trillion ceiling set by Parliament in June last year.
The National Assembly in June last year increased the public debt limit to Sh10 trillion to allow the government to borrow Sh846 billion to plug the budget deficit in the 2022/23 financial year.
