Treasury’s huge funding gap points to higher loans cost

Treasury secretary Henry Rotich’s revenue plans left the biggest financing gap ever in the national Budget, setting the government up for heavy borrowing that could reverse the recent drop in the cost of loans, analysts have said.

Mr Rotich on Thursday presented to Parliament a Budget with a Sh329 billion deficit that he said would be financed through a combination of debt and grants. But the slow pace of revenue growth means the gap could be wider, leading the country further down the debt financing path.