Treasury secretary Henry Rotich published the statement of actual revenue showing expenditure on public debt totalled Sh20.9 billion. FILE
What you need to know:
Treasury secretary Henry Rotich published the statement of actual revenue and net exchequer issues as at June 30, 2013 in a gazette notice published on Friday.
The statement shows expenditure on public debt actually totalled Sh20.9 billion less than the Sh304.98 billion that was earmarked for the financial year.
The interest bill on domestic borrowing had hit Sh110.2 billion as at June 30, 2013, compared to Sh82.3 billion as at June 30, 2012.
Kenya spent Sh284.11 billion paying off public debts in the 2012/2013 financial year, the Treasury has disclosed in statements outlining government expenditure for the financial year ended June.
Treasury secretary Henry Rotich published the statement of actual revenue and net exchequer issues as at June 30, 2013 in a gazette notice published on Friday.
The statement shows expenditure on public debt actually totalled Sh20.9 billion less than the Sh304.98 billion that was earmarked for the financial year.
The financial statements show high expenditure on debt and other recurrent bills forced the Treasury to exceed its borrowing estimates, especially from the domestic market.
Total domestic borrowing and interest repayments stood at Sh331.83 billion in the year ending June 30, at 19 per cent above the printed estimates of Sh227.75 billion.
“Gross government domestic debt stood at Sh1.075 trillion on July 19, 2013, a Sh25 billion increase from Sh1.051 trillion at the end of June 2013, largely on account of Treasury bonds,” said Central Bank of Kenya in its weekly report as at July 26.
The Treasury is instead seeking to raise additional funds through improved tax collection and by issuance of a maiden Eurobond that is expected to be worth $1 billion.
Mr Rotich said in his budget presentation in June that the 2013/14 borrowing will comprise Sh223 billion in foreign debts and Sh106.7 billion in local debt. The local borrowing in the 2012/13 financial year stood at Sh164.9 billion.
The gazette report, however, shows that the country received less than the projected in foreign loans and grants in the last financial year.
The printed estimates for external loans were Sh37.24 billion, with the actual receipts as at June 30 amounted to Sh23.57 billion. At the same time, grants from external organisations were estimated at Sh8.72 billion, while actual receipts stood at Sh5.83 billion.
With the lower interest rates on government securities, however, treasury is paying lower accumulated interest week-on-week compared to the same period in 2012.
According to CBK data, the cumulative interest on government securities paid by July 19 was Sh770 million, compared to Sh1.04 billion by the same date in the 2102/13 financial year.
If the reduced interest rates as compared to the same period last year persist the country could yet see the debt repayment bill come down from the 2012 figures.
The lower interest rates have also curbed the appetite of banks’ lending to CBK to some degree, with the holdings of the Treasury bonds and bills by banks standing at 49 .8 per cent as at July 19, translating to about Sh514 billion of the total outstanding government papers of Sh1.033 trillion, and is about four percentage points lower than the 53.8 per cent holding as at mid-April.
The Treasury has projected that Kenya’s public debt will hit Sh2.4 trillion in the next three years, equivalent to a growth of Sh520 billion from the current levels.
