Kenya’s debt surges to Sh3.5tn, KRA off tar­get

Gross do­mes­tic debt stock rose 33.6% to Sh1.854tn as at end of Septem­ber 2016, com­pared to Sh1.388tn in 2015, sim­i­lar pe­riod

The Star (Kenya) - - News Business - WEITERE MWITA @MwitaMartin

Pub­lic debt has hit a new record Sh3.566 tril­lion, sig­nal­ing a con­tin­ued heavy bor­row­ing by the na­tional gov­ern­ment to bridge its bud­get deficit for the 2016-17 fi­nan­cial year.

Lat­est data from the Na­tional Trea­sury shows gross do­mes­tic debt stock in­creased by 33.6 per cent to Sh1.854 tril­lion as at end of Septem­ber 2016, com­pared to Sh1.388 tril­lion in a sim­i­lar pe­riod last year.

The to­tal ex­ter­nal debt stock, in­clud­ing the in­ter­na­tional sov­er­eign bond stood at Sh1.712 tril­lion at the same pe­riod, point­ing to more do­mes­tic bor­row­ing by the gov­ern­ment.

This comes even as the Kenya Rev­enue Au­thor­ity missed its quar­ter one tar­get by Sh14.4 bil­lion, de­spite a strong per­for­mance in July and Au- gust. In the two months, the tax­man col­lected Sh178.20 bil­lion, Sh25.47 bil­lion more than the Sh152.73 bil­lion col­lected in the same pe­riod of the 2015-16 fi­nan­cial year.

Cu­mu­la­tive rev­enue col­lec­tion in­clud­ing Ap­pro­pri­a­tions in Aid (in­come that a gov­ern­ment de­part­ment is au­tho­rised to re­tain rather than sur­ren­der to the Con­sol­i­dated Fund) from July through Septem­ber 2016 amounted to Sh313.6 bil­lion (equiv­a­lent to 4.2 per cent of GDP). This is against a tar­get of Sh328.0 bil­lion, 4.4 per cent of GDP.

“This rep­re­sented an un­der­per­for­mance of Sh14.4 bil­lion mainly due to short­falls in in­come tax (Pay As You Earn, A-I-A col­lec­tion, value added tax (im­ports) and im­port duty,” says Trea­sury CS Henry Rotich in the quar­terly eco­nomic and bud­getary re­view for the pe­riod end­ing Septem­ber 30.

The Trea­sury has set a tar­get of Sh1.37 tril­lion in or­di­nary rev­enues for KRA this fi­nan­cial year, which is Sh160 bil­lion more than the Sh1.21 tril­lion col­lected in the fis­cal year ended June 30. The tar­get com­prises Sh1.33 tril­lion in tax rev­enues, and Sh44.38 bil­lion in non-tax rev­enues.

The cu­mu­la­tive ex­pen­di­ture and net lend­ing, in­clu­sive of trans­fers to county gov­ern­ments for the pe­riod end­ing Septem­ber 30, amounted to Sh387.6 bil­lion which was Sh139.3 bil­lion be­low Sh526.9 bil­lion tar­get.

The Trea­sury has at­trib­uted the short­fall to “low ab­sorp­tion lev­els in op­er­a­tions and main­te­nance, and wages and salaries for the na­tional gov­ern­ment”.

Rotich, how­ever, main­tained that the econ­omy re­mained re­silient in 2016 with a growth of 6.2 per cent in the sec­ond quar­ter of 2016, com­pared to a growth of 5.9 per cent in the first quar­ter of 2016. This was a fur­ther im­prove­ment from the 5.6 per cent growth in 2015.

/COUR­TESY

China Am­bas­sador to Kenya Dr Liu Xianfa and Na­tional Trea­sury CS Henry Rotich dur­ing the sign­ing of a China Buyer Credit Agree­ment to fi­nance roads

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