President William Ruto has direct the National Treasury to work with ministries to raise Sh300 billion to reduce the country’s debt.
Addressing the Bicameral House, Ruto said that the country should never borrow to finance recurrent expenditure.
He said the reduction of spending is pegged on reducing the government’s borrowing needs from an estimated Sh900 billion in the fiscal year to close the financing hole.
“We must bring ourselves and our country to sanity. To this end, I have instructed Treasury to work with Ministries to find at least Sh300 billion in this year’s budget so that we can remove it because the market cannot sustain the kind of borrowing, we are doing as government,” he said.
Ruto had promised to pay the Sh504 billion pending bills passed down by the outgoing administration, in a major relief to businessmen and contractors who do business with the government.
He said the government will work on the mounting pending bills that have forced many small and medium-sized businesses to close or face auctions.
Data from the National Treasury shows pending bills climbed to Sh504.7 billion in the financial year ended June, a 40.39 per cent jump from Sh359.5 billion the previous year, making it the annual jump on record.
A large number of business people who have contracts with the government have ended up being blacklisted by credit reference bureaus after falling behind on loan repayments or defaulting.
“We shall give priority to the expeditious resolution of our pending bills so that the government can meet its obligations and facilitate better economic performance,” Ruto said in his inauguration speech.
He said the government would work on a proposal for the suppliers to collect the money within a shorter period.