daniel chigunwe
The Finance and National Planning Committee was informed by Treasury Cabinet Secretary Njuguna Ndung’u that the government is facing financial difficulties as a result of maturing short-term debt, the declining value of the shilling, and rising interest rates.
“We are in a very tight financial position largely brought about by short-term debt repayment, high-interest rates, and the depreciating shilling which has increased our expenditure by Ksh145 billion (US$945,1 million),” Prof Ndung’u said.
“We are facing so many external headwinds as well as negative external shocks. We are facing a liquidity crisis as we manage short-term debt. But I want to assure the country that we are not facing an insolvency crisis.”
In front of the committee, Prof. Ndung’u defended the National Treasury budget cutbacks as they were outlined in Supplementary Estimate I. He noted that because of the maturing debt, the nation is currently experiencing short-term financial issues.
According to Prof. Ndung’u, in addition to these external challenges, the Treasury is also dealing with high taxes and living expenses.
“People have been telling us to reduce the taxes. However, the cost of living arises due to supply-side problems. Inflation came down to 6.9 percent and the same is being fueled by the high cost of fuel,” Prof Ndung’u said. The numbers are very scary as the Energy and Petroleum Cabinet Secretary Cabinet Secretary Davis Chirchir indicated that fuel prices could hit Ksh300 ($1.98) per liter in Kenya should the war between Israel and Hamas continue,” he added. -Business Insider Africa
Bongani Ndlovu
Online Reporter