Development budget set to hit Sh1.15 trillion in the next three years – Business Daily
National Treasury and Economic Planning Cabinet Secretary, Prof Njuguna Ndung’u during a past function on January 11, 2023. PHOTO | DIANA NGILA | NMG
The government will increase development spending to Sh1.15 trillion in three years as the new administration seeks to sink more money into infrastructure, energy and ICT.
The new Budget Policy Statement shows that the outlay will increase from Sh596.6 billion in the current financial year to Sh1.15 trillion in the next three years.
In the projections, energy, infrastructure and information communication and technology (ICT) will take the largest share of the allocations at Sh276.7 billion in the current fiscal year expected to rise to Sh324.4 billion in 2025.
Read: Treasury faces pressure as borrowing trail targets
“In the financial year (FY) 2021/22, a total of Sh540.1 billion was spent on development expenditure. In the FY 2022/23, this amount is projected to increase to Sh596.6 billion and further increase to Sh1.1496 trillion over the medium term,” the National Treasury said in the latest budget policy statement report.
“The allocation to development expenditures is projected to increase to 35.8 percent in the FY 2023/24 and remain above the recommended threshold [of 30 per cent] over the medium term.”
The report shows the spending is projected to rise to Sh796.4 billion in FY2023/24, to Sh901.5 billion, Sh1.07 trillion and Sh1.15 trillion in the next three years respectively.
Kenya’s ballooning public debt is projected to increase to Sh12.4 trillion in 2026 from the current Sh9.4 trillion.
The debt stock represents 64.9 percent of Kenya’s gross domestic product (GDP) with the domestic stock standing at Sh4.38 trillion as external debt amounted to Sh4.36 trillion.
Kenya’s debt is set to expand after the International Monetary Fund (IMF) approved a Sh81.7 billion loan a few weeks ago, paving the way for the immediate release of the funds for budgetary support.
Also read: Judiciary wants budget doubled to Sh43bn for automation, expansion
A raft of new tax changes and measures will see Kenyans bear the brunt of government infrastructural plans adding to the pain of inflation that has pushed up the cost of living to a five-year high.
→ [email protected]
