Public Debt Service during Covid-19 Crisis to increase Miseries of the Poor in Kenya

The analysis revealed that the growth observed in Kenya’s expenditure has majorly been fuelled by the high public debt spending. This has been at the expense of pro-poor sectorial spending such as spending in the health, social protection, water and sanitation and the education sectors. The situation has worsened because of the Novel Corona Virus Disease. In its report on the estimates of revenues and expenditures for FY 2020/21, the Budget and Appropriations Committee indicated that the fiscal deficit is projected to increase to 7.3% of Gross Domestic Product (GDP) from the initial projection of 4.9% of GDP as had been earlier indicated in its report on the Budget Policy Statement of 2020.

    It is expected that the deficit will be financed by public debt (The National Assembly, 2020). In his speech during the issuance of the 2020/21 budget statement, the cabinet secretary of the National Treasury indicated that government revenue in financial year 2020/21 is estimated to reduce by about Ksh 172.0 billion (The National Treasury and Planning, 2020) implying that the fiscal deficit is likely to widen and more government borrowing will be incurred to finance the deficit. The major limitation that the study faced was insufficient data on the effect that the pandemic has had on these four pro-poor sectors due to the inherent fact that the effects of the pandemic disease are still been felt all over as it was discovered recently in December 2019.

Public Debt Service during Covid-19 Crisis to increase Miseries of the Poor in Kenya



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  • Yet even during this unprecedented crisis, low- and middle-income countries will still be asked to pay a total of $130 billion in debt service this year. Dozens of nations have requested debt service relief. Many of these are in distress and face the possibility of default. Others may be forced to make devastating cuts in public services that are badly needed to bandage their wounded people and economies—just to service their debts. Some say our hopes for achieving the Sustainable Development Goals may already be a fading dream, especially for the world’s poorest.

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