For Every KSH 100 Collected as Revenue in July and August, KSH 57 Went To Pay Debts

Kenya’s economy is still running on the wheels of debts. The country’s public debt now stands above 5 trillion shillings, more than 58 percent of the gross domestic product.

It has now emerged that for every 100 shillings that were collected in revenue in July and August, the National Treasury used 57 shillings to service debts, leaving only 43 shillings for other governmental use.

In the recent past, Kenyans and other international organs had raised concerns of Kenya’s roaring appetite towards borrowing with the burden now becoming almost unbearable.

For the two months of July and August, a total of 118.08 billion shillings went to the servicing of debts, an increase of 35.08 billion shillings compared to the same time in 2017.

Given that a total of 204.79 billion shillings were collected as revenue in July and August, a whopping 57.66 percent went to paying off debts leaving the rest for other developments.

The government is now spending more of the revenue collected to settle debts leaving less than 10 percent into the economy because a huge percent of the remaining amount goes to recurrent expenditure.

County governments seem to be receiving the most hit. During the two months, 32 counties did not receive any funding from the national government and the same is set to continue in the coming months.

From the revenue collected for the two months, recurrent expenditure including salaries, allowances, and administrative expenses consumed 133.23 billion shillings.

Development projects in the two months received only 11.69 billion shillings. 7.27 billion shillings went to pensioners while 4.03 billion shillings was shared among 15 counties.

The government intends to use at least 870 billion shillings to pay debts during this fiscal year. 505.86 billion shillings is set to be paid to domestic creditors while 364.66 billion shillings to service foreign debts.