Treasury to cut local borrowing by a quarter

Thursday February 18 2016

National Treasury Cabinet Secretary Henry Rotich. A draft Budget Policy statement published by Treasury, turning to the local market has been reduced to Sh168.2 billion from Sh221.5 billion in the current budget. PHOTO | SALATON NJAU | NATION MEDIA GROUP

National Treasury Cabinet Secretary Henry Rotich. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

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Kenya will cut its planned domestic borrowing for the 2015/16 (July-June) fiscal year by about a quarter to 168 billion shillings ($1.65 billion), on the back of expenditure cuts of 1 percent of GDP, its finance minister said on Thursday.

The plan, contained in a supplementary budget that is yet to be approved by the cabinet and the national assembly, will reduce the budget deficit to just under 7 percent of the gross domestic product, from the initial target of 8.7 percent, Henry Rotich told Reuters.

"It (deficit) is coming down from about 8.5 percent to about 6.9 percent," he said.

The expenditure cuts, which amount to 50-60 billion shillings, had been considered carefully to ensure they do not hurt the country's economic prospects.

"We have done very careful cuts so it doesn't impact on the growth," Rotich said.