Money Markets
Treasury on verge of breaching its overdraft limit
The government borrowed Sh25.4 billion from CBK in the past week, compared to the maximum Sh25.9 billion that it is allowed to take as overdraft.
Posted Sunday, September 11 2011 at 20:48
But domestic ordinary revenue collection amounted to an over-performance of Sh3.3 billion.
As at June 30, 2011, Treasury’s quarter four review of government finances showed that the donors had failed to release as much as Sh25 billion intended for use in the 2010/11 fiscal year.
The same trend of slow disbursement continued into this fiscal year, with Treasury saying this also had to do with the slow procurement process, although it did not disclose the amount withheld at present.
“At the beginning of the financial year, line ministries start to procure and this can take time.
This explains why we don’t see disbursements early in the financial year except maybe for ongoing projects,” said Dr Mwau.
Some donors have said they would withhold funds due to scandals that have dogged government spending on projects including free education and construction of an embassy in Japan.
girungu@ke.nationmedia.com
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