National Treasury Cabinet Secretary, Professor Njuguna Ndung’u, has acknowledged the difficult financial situation in Kenya, citing insufficient resources to fund important public expenses. He compared the country’s budget to a household budget and stated that the available funds are not enough to cover the listed expenses. He asked for patience from Kenyans as the government works to resolve the issue.

During a speech at an induction forum for the Senate Standing Committee on Finance and Budget, Professor Ndung’u stated that the country is facing a financial constraint and that they need to work together to overcome it. He also added that once they secure more funds, all problems can be resolved.

However, the update on the state of the economy is not good news for millions of Kenyans who are already struggling with the high cost of living. In his statement on the Financial Year 2022/2023 first supplementary estimates, Professor Ndung’u failed to implement government austerity measures.

Only Ksh 106 billion has been proposed for reduction from development spending, with Ksh 92.2 billion being reallocated to recurrent expenditure, leading to savings of only Ksh 13.3 billion. In the first half of the financial year, the government missed its revenue collection target by Ksh 51.8 billion and under-expended by Ksh 108.6 billion, due to lower absorption in recurrent and development expenditures and delayed disbursements to county governments.

Professor Ndung’u compared the government’s financial situation to a household budget and stated that just like a household, the government has needs but not enough funds to fulfill them. However, he added that by working hard and being patient, they can secure the funds needed to fulfill their needs.

Governors are currently in a disagreement with the national government over the delayed disbursements and are demanding a larger share of the 2023/2024 budget. The 47 devolved units are requesting a shareable allocation of Ksh 425 billion, while the Commission on Revenue Allocation proposes a Ksh 407 billion allocation. The Executive has stated that only Ksh 380 billion is available.

The National Treasury’s current focus is on managing the national debt, which stood at Ksh 8.7 trillion as of September last year. Professor Ndung’u stated that if they need to borrow, it will be to rescue costly short-term debt and that they will borrow concessionally to solve the expensive debt.

Governors are scheduled to meet with President Ruto this weekend to discuss the financial standoff.

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