Members of Parliament have slashed Treasury’s earlier borrowing plan by Sh16 billion. The MPs have given Treasury Cabinet secretary Henry Rotich go-ahead to borrow an additional Sh205.95 billion in the next financial year for government operations, down from Sh221.1 billion he had sought.
The Budget and Appropriations Committee also cut Sh7 billion from the planned domestic borrowing of Sh320.7 billion to Sh313.05. Cumulatively, MPs allowed Rotich to borrow Sh519 billion to finance the deficit in the budget to be tabled in Parliament next week.
The committee report notes that Rotich warned MPs that Senate had made its own request in the division of revenue between national and county governments, which had the potential of increasing overall fiscal deficit beyond the Sh519 billion.
However, MPs assured Treasury that the Division of Revenue Bill will go through a mediation process if the National Assembly and Senate disagree. In its budget proposals, published November last year, Treasury had projected that fiscal deficit for the 2017/18 financial year would top Sh582.4 billion—seven per cent of Gross Domestic Product—compared to Sh548.3billion in the current financial year. Part of the borrowing will go towards financing the Standard Gauge Railway project at a cost of Sh125 billion.
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