Ruto: Kenya has cut back borrowing by Sh400b

Kenya has cut down borrowing by at least Sh400 billion in order to reduce its debt burden and free money for development, President William Ruto revealed yesterday.

The President also said the government is also reducing the fiscal deficit from 6.2 per cent of the Gross Domestic Product (GDP) to 4.4 per cent this year and below four per cent next year.

“Kenya is well on course with the International Monetary Fund (IMF) and other development partners in ensuring Kenya is on a sound economic footing. On the debt situation, we presented a budget last week that has cut down borrowing by Sh400 billion and we are reducing our fiscal deficit from 6.2 per cent of the GDP to 4.4 per cent this year and below four per cent next year,” said the President.

He made the remarks yesterday at State House after holding talks with Japan Prime Minister, Fumio Kishida, who is in Kenya as part of his African tour.

Building confidence

According to the President, Kenya is working on building confidence with development partners, including Japan, so that the country can properly harness the potential and partnership that will drive the economy.

At the same time, he assured that the government will resolve taxation issues around Japan’s Overseas Development Assistance (ODA) Sh10 billion projects extended to support development of Kenya Medical Research Institute (KEMRI), Ahero irrigation scheme and one other project.

The President said the taxation issue threatens the future of the projects, even as he committed to ensure that they run smoothly.

“The Government will resolve the tax issues that went to court in the next four months so that we can tap into the resources that were made available to us,” assured Ruto.

Also discussed, said Ruto, were matters of International Financial System (IFS) and its reform, in a bid to achieve a fairer and a structure that recognises the huge potential of energy resources including geothermal, wind, solar and hydro in the continent.

He also said a better system will go a long way in ensuring that these resources unlock the huge potential in the continent.

“There is need to reform IFS so that it is much more responsive and it can provide the resources necessary and as a continent, we will not just discuss on adaptation or loss and damage but we begin to have conversations about investment in the resources we have to unlock our potential and provide a solution to the subject of climate change,” said Ruto.

Kishida said Japan appreciates Kenya’s efforts in public finance reforms including raising transparency and sustainability of debt.

He also called on the need to collaborate on promotion of the rule of law.