Kenya To Borrow KSh 887b In 2023/2024 Financial Year After Revising Target Up

• The National Treasury earlier intended to borrow KSh 718.9 billion but it projects to collect less revenue than anticipated in 2024
• During the five months concluding in November 2023, tax collections amounted to KSh 963.7 billion, constituting 34.6% of the annual target
• KRA explained that revenue performance was affected by the depreciating shilling and tight financial markets marked by an increase in lending and interbank rates

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Kenya has announced plans to borrow an additional KSh 168 billion in the 2023/2024 financial year, marking a significant revision in the borrowing target.

The National Treasury intended to borrow KSh 718.9 billion but projects to collect less revenue than anticipated in 2024.

"The budget deficit including grants projected at KSh 886.6 billion (5.5% of GDP) from the budget estimates of KSh 718.9 billion (4.4% of GDP)," the exchequer stated, as reported by Business Daily.

President William Ruto's government faced revenue shortfalls in the first five months of the 2023/2024 financial year.

What did KRA collect in first 5 months?

According to the most recent report from the Kenya Revenue Authority (KRA), during the five months concluding in November 2023, tax collections amounted to KSh 963.7 billion, constituting 34.6% of the annual target of KSh 2.787 trillion set for the fiscal year 2023/24.

During a similar period in 2022, KRA had attained KSh 856.6 billion, accounting for 40% of the KSh 2.145 trillion annual target.

The taxman explained that revenue performance was affected by the depreciating shilling and tight financial markets marked by increased lending and interbank rates.

Due to the revenue underperformance, despite increased taxes and levies introduced by the Finance Act 2023, the projected ordinary revenue for the ongoing financial year has been revised downward from KSh 2.787 trillion to KSh 2.5768 trillion.

What is Kenya's debt?

As of September 2023, the national debt stood at KSh 10.58 trillion, marking a 3.82% increase in borrowing within the financial year 2023/24.

The gross public debt comprised KSh 5.66 trillion (53.5%) in external debt and KSh 4.92 trillion (46.5%) in domestic debt.

The national debt increased by 22.57% compared to where it stood when Uhuru Kenyatta handed over the government to Ruto.