Government plans to cut local borrowing
03 May 2013, 10:05
Nairobi - The government plans to cut its domestic borrowing in the fiscal year from July to help reduce its overall debt, and will target 114.1 billion shillings ($1.4 billion) in domestic issues, a finance ministry paper showed on Thursday.
The government's aim is to reduce the debt-to-GDP ratio from around 45 percent, though it did not say to what level.
Although the government had set out to borrow 106.7 billion shillings from the local market in its budget last June, it raised the borrowing target in January to accommodate extra spending including public sector wage hikes.
In a budget policy statement tabled in parliament on Thursday, the Treasury projected that 30 percent of the local financing would be through Treasury bills, at interest rates ranging from 7 to 11.73 percent.
The balance would be raised through Treasury bonds of various maturities at interest rates of 11.855-12.382 percent, the Treasury said.