Kenya’s Finance Minister, Njuguna Ndung’u, outlined today the strategic priorities of the upcoming 2024/25 budget, emphasizing a balanced approach to addressing the country’s debt burden while supporting its fragile economic recovery. The budget aims to build on projected economic growth of 5.5% for the year, following a modest increase from 5.6% in 2023, driven by key sectors such as agriculture, manufacturing, and financial services.
Speaking ahead of the budget presentation to parliament, Ndung’u underscored the importance of policies aimed at sustaining economic momentum and creating job opportunities, particularly for the youth. Kenya’s public debt, currently estimated at 68% of GDP for the fiscal year 2023/24, is anticipated to decrease to 64.8% in the coming fiscal year, reflecting efforts to manage fiscal obligations responsibly.
Earlier this year, Kenya successfully issued a $1.5 billion international bond to support the buyback of a significant portion of a $2 billion bond maturing in June, demonstrating confidence from international investors despite previous concerns over fiscal sustainability. In a proactive move, part of a $1.2 billion World Bank budget support loan will be utilized to make a substantial payment on a Eurobond maturing this month, easing immediate debt pressures.
The approved 4 trillion shilling budget for the fiscal year, up from initial proposals, highlights government efforts to meet evolving economic challenges and sectoral needs. However, the Finance Bill 2024, designed to outline revenue-raising measures, has drawn scrutiny for potential impacts on sectors such as financial services, transportation, manufacturing, and retail.
As Kenya prepares to navigate economic uncertainties, the upcoming budget presentation is poised to be a crucial milestone in shaping the country’s fiscal path and signaling its commitment to sustainable economic growth.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
14th June 2024
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