- August 27, 2020
- Posted by: IPF Kenya
- Category: Policy Brief
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.