The Ministry of National Treasury has kicked off budget preparation process for the next fiscal year, 2023/24 and the medium-term budget.
The exercise comes as the country continue to suffer economic downturn occasioned by multiplicity of factors among them heavy external public debt, corruption, high recurrent expenditure and effects of the Coronavirus pandemic among others.
The war between Ukraine and Russia has amplified by the harsh drought situation in the country and fluctuation of foreign exchange rate.
However, the government has announced plans to scale down on borrowing and maximise on investments as well as relooking the budget making process in the country.
National Treasury and Economic Planning Cabinet Secretary Professor Njuguna Ndung’u said the government will pursue an all-inclusive growth model using the bottom-up approach.
“As we prepare for the FY 2023/24 and the Medium Term Budget, our focus will be on aggressive revenue mobilization so as to bring on board additional revenues. In addition, we intend to contain growth in non-priority expenditures so as to reduce the fiscal deficit that will support reduction in the growth of public debt to ensure sustainability.” Njuguna said.
The CS further highlighted five points on which the medium term budget will be anchored on including Real GDP growth above 6.0 percent over the medium-term.
Inflation being maintained within the range of ±2.5 per cent of the target 5 per cent after the current shocks are resolved, protecting competitiveness so that interest rate and exchange rate are stable and predictable over the medium-term, Gradual improvement in revenue collection to over 18.0 per cent of the GDP over the medium-term and Gradual reduction in expenditures to about 22.7 per cent of GDP over the Medium-Term in line with the fiscal consolidation policy.
On his part the National Assembly Budget and Appropriations Committee chairman Ndindi Nyoro has pointed out that as the treasury plans to make the budget the country should reduce that dependence on imported goods and focus on the internal supply chain and reduce on government borrowing.
“We must calibrate how we make our budget making process and give more emphasis on investments…we should put more resources in sectors that are investment invest in nature,” said Nyoro.
He added that in the past, the country has been solving every problem monetarily including ones that need physical solutions especially the drought situation that has brought about acute shortage of food supply in over 20 counties in the country.
He also called on the overhaul of state owned entities that are hemorrhaging tax payer’s money, this in reference to Kenya national carrier Kenya airways(KQ) which has lost shillings 1.4 billion due to the pilots’ strike at the back of many times the airline has been bailed out by the government for making losses and being unable to pay its loans.
The CS called for public and stakeholder participation in the budget making process as required by the constitution. the national treasury is also seeking to achieve president William Ruto’s plan of reducing government expenditure by Sh300billion.
