Treasury CS: Kenya in Deep Financial Hole

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National Treasury Cabinet Secretary Njuguna Ndung’u has warned of a looming delay in the processing of salaries for civil servants and that the country is in a deep financial crisis.

The Treasury CS claimed that the Kenya Kwanza administration is experiencing financial difficulties as a result of underwhelming revenue growth and constrained access to capital because of dwindling borrowing capacity.

The CS further disclosed that the exchequer is in a financial mix and government employees from ministries and state agencies will have to wait for their April salaries with a majority of them going for their Easter holidays without pay.

According to reports, the state had amassed Sh1.83 trillion in terms of collections from deposits for income taxes, customs charges, governmental service fees, fines, and loan repayments.

Out of this, Sh727 billion which represents 40 percent of the collections, went toward ongoing expenses while Sh694 billion or 38 percent went into public debt.

The cash crunch comes after the government, through the cabinet, replaced the nominal debt ceiling of Sh10 trillion with a debt anchor set at 55 percent of Gross Domestic Product (GDP) after the country breached its public debt ceiling by hitting Sh9.145 trillion ($73 billion) in December 2022.

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