Public Debt And Privatization Committee Meets With CBK Governor And Auditor-General Over The 2023/24 Budget
Central Bank of Kenya with parliamentary officials after the session yesterday
By James Mwangi
The Governor of the Central Bank of Kenya Dr. Patrick Njoroge yesterday appeared before the Public Debt and Privatization Committee that is chaired by Balambala MP Abdi Shurie to deliberate on the 2023/24 Financial Year (FY) Budget estimates.
In the session, the governor noted that the performance of the government’s domestic borrowing programme is at 57 per cent of the revised target of Sh434.9 billion for the financial year 2022/23. Currently, a total of Sh240 billion has been borrowed with only a few weeks remaining to the end of the financial year.
Further, the fiscal consolidation path over the medium-term is expected to stabilize the rate of growth in public debt, with a projection of a reduction of the fiscal deficit from 8.2 per cent in FY 2020/21 to 3.6 per cent in 2025/26.
Dr. Njoroge raised a concern on the sharp increase in borrowing targets in the recent past, with a peak in FY 2021/22 at Sh662.8 billion, while FY 2023/24 projects to borrow Sh533 billion, which he finds quite ambitious with limited market capacity.
He however highlighted certain measures that could be taken to mitigate the borrowing risks including exploring external financing options with an optimal mix of concessional and commercial funding, effective liquidity management and dealing with concentration risks in the domestic debt market.
This being the last session the governor was appearing before the Public Debt Committee ahead of the end of his term on 17th June, members took their time to thank him for all the insightful ideas he has shared with the committee on matters public debt, and to wish him well in his future endeavors.
The committee also met with officials from the office of the Auditor-General where they raised concerns over the growing level of public debt in Kenya.
They noted that the outstanding amount of public debt has increased from Sh4.8 trillion in FY 2017/18 to Sh8.47 trillion in the year 2021/22 (approx. 77 per cent) over the five-year period.
The officials also confirmed to the committee that they are currently carrying out Performance Audit on determination of borrowing needs that will be issued before the end of this financial year.
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