Kenya’s $6.9 Billion 2016/2017 Budget Deficit Will Be Financed Through Heavy External Borrowing

Kenya’s budget deficit for the fiscal year 2016/2017 is likely to be more than 9 percent of gross domestic product (GDP), based on a forecast given by the country’s finance minister Finance Minister, Henry Rotich, said in a budget speech the deficit would be $6.9 billion a figure equivalent to 9.3 percent of Kenya’s GDP. The government has however maintained that Kenya’s public debt “remains sustainable”, with the net present value of public debt to GDP below 50 percent and posing a “low risk of debt distress.”

While presenting the budget estimates in April this year, Treasury Cabinet Secretary mentioned that “the external borrowing will largely be biased towards concessional loans.” But even as government plans to tell Kenyans where they will get money to finance the huge budget, corruption has been mentioned as the key challenge that if managed, it would largely reduce the country’s increasing debts. Read full story here.