Kenyans Question Where Loans, Tax Revenue Went As Gov't Says It's Broke, "You Guys Just Resign"

• Treasury CS Njuguna Ndung'u said the government is broke and is struggling to pay salaries for civil servants
• Social media users in Kenya raised concerns about the whereabouts and utilisation of loan funds from other countries.
• Others questioned the leadership proficiency of the Kenya Kwanza government, urging them to step down if they were unable to revive the economy

Elijah Ntongai, a journalist at TUKO.co.ke, leverages more than three years of expertise in financial, business, and technology research, providing profound insights into both Kenyan and global economic trends.

Treasury Cabinet Secretary Njuguna Ndung'u explained that the government has not disbursed funds for the National Government Constituency Development Fund (NG-CDF) because the government is broke.

Testifying before the National Assembly Finance Committee on December 6, Ndung'u acknowledged the fiscal challenges faced by the Kenya Kwanza administration in generating revenue.

Financial struggles

The CS highlighted that dwindling cash reserves in the public coffers are hindering the government from achieving its financial objectives, with Ndung'u noting that the Kenya Kwanza government is struggling to meet salary obligations for civil servants due to the lack of funds.

"NG-CDF will be released as soon as government has enough funds; at the moment, we are not getting taxes as required, and the government is having challenges paying salaries, so please bear with us; we are working around the clock to make things work," Ndung'u told MPs.

What is the government doing about cash crunch?

Ndung'u assured the legislators that the government was working hard to ensure funds were available to counties.

"We are doing everything possible to ensure the disbursement of CDF funds no matter how little we can," he added.

How Kenyans reacted

Social media users in Kenya raised concerns about the government's financial situation, questioning the whereabouts and utilisation of the loan funds received from other countries.

Others questioned the leadership capabilities of the leaders in the Kenya Kwanza government, calling for them to resign if they cannot revive the country's economy.

Others called upon the government to stop blaming the previous Jubilee government or other acts of nature, such as El Nino and embark on reviving the economy.

@jakowakjaoko said,

Can't they resign? @WilliamsRuto, you guys just resign? We've got better leaders than the lot of you.

@Sal16036146 wrote

Thought the flying president was bringing back loans n Jobs? Btw what happened to the 17 billion oil, or it's none of our business.

@GKmukui said

The government is getting it wrong. You cannot revive a dying economy by increasing taxes. It should be the opposite, accompanied by increased spending to boost employment and aggregate demand. There is always a deadweight loss of taxation and maximum tax revenue that they can get.

@Martoniki1990 wrote

Just wait and see how government bonds will behave. These thugs are not only looting but also creating an aura of pessimism that will traumatise investors.

@MNgunyar wrote

The government collects money continuously, I thought by now the old chorus of empty coffers is too old. We are broke, yet they want to reintroduce the CAS posts through a bill? Who will pay them?

@TonyAlexIrungu said

The Laffer Curve is kicking in fast and furious. The more the tax hikes, the less the spending, the less the taxes the government collects. Luxury spending is declining fast. On November 16, 2023, he said that the Treasury has raised fears of losing Sh133.5 billion in projected revenue in the current financial year due to a drop in motor vehicle and fuel imports and lower sales of beer, spirits, and cosmetics.

Expert explains why Kenya is facing cash challenges

In other related news, experts sought by TUKO.co.ke explained why the government of Kenya is broke and facing cash flow challenges.

David Kariuki, a financial and strategic management expert said that the government got here due to rampant corruption and pilferage of taxes into people's pockets, while the government was left to get loans to finance its projects.

"We got to serious liquidity issues given the fact that the government expenditure outweighs the Revenue collected leading to massive borrowings of expensive loans to cover the shortfalls.," said Kariuki.