NAIROBI – Kenya plans to reduce its fiscal deficit in order to achieve public debt sustainability, a senior government official said on Thursday.
Cabinet Secretary in the National Treasury Henry Rotich told journalists in Nairobi that the country’s fiscal deficit is expected to close at 6.5 per cent of the Gross Domestic Product (GDP) for the 2017/2018 financial year, down from 8.5 per cent the previous year.
“Our goal is to maintain government borrowing at levels that are consistent with sustainability parameters,” Rotich said.
The National Treasury is seeking to lower the fiscal deficit to less than six per cent for the 2018/2019 financial year and thereafter maintain it at less than four per cent in the medium term.
Rotich said Kenya’s public debt currently stands at approximately 50 per cent of the GDP. “This is well below the International Monetary Fund (IMF) debt distress levels,” he added.
Rotich said the country will only contract debt to fund priority sectors such as infrastructure. Rotich noted that the government is implementing austerity measures in order to achieve its fiscal deficit targets.
He said the economy is expected to expand by 5.1 per cent in 2017, down from the six percent projected earlier in the year.
“The economic slowdown is largely due to drought and the prolonged electioneering period occasioned by the repeat presidential polls,” Rotich said.