Govt plans extra KES 20-30 billion borrowing in 2013/14
04 December 2013, 16:43
Nairobi - The government is likely to borrow 20 billion-30 billion shillings more in the fiscal year to next June to meet extra funding demands, Finance Minister said on Wednesday.
The government reached a deal with striking teachers in July to pay them higher wages, which will add to its spending over and above the 1.6 trillion shilling budget presented in June.
In the budget, the cabinet secretary for the national Treasury Henry Rotich, factored in local borrowing of 106 billion shillings to help plug a fiscal deficit worth 7.9 percent of gross domestic product.
"It could go up by between 20 to 30 (billion shillings). We are firming up the numbers," Rotich told Reuters.
He said the government had not yet decided if the additional funds will be borrowed from the domestic market or if a part of it will be borrowed through a Eurobond of up to $2 billion planned for early next year.
"What will be domestic and external will depend on when we will go to the market for the Eurobond. We have not really decided whether it's external or domestic," Rotich said.
The proposals will be contained in a supplementary budget to be tabled to parliament before its Christmas recess that will also be used to re-allocate about 100 billion shillings of budget money, Rotich said.
The re-allocated funds, some of which will be savings from recurrent expenditures derived through austerity measures, will go towards paying bills totalling 35 billion shillings that were carried over from last financial year as well as towards building and road maintenance.
"It's a mixture of delaying some expenditures and also rationalising expenditure from those non-priority (areas) and a bit of borrowing," the minister said.