President William Ruto has appointed an independent task force to carry out a public debt audit.
Addressing the nation on Friday from State House, he noted that public debt continues to be a major int of engagement and conversation in Kenya.
"I have today appointed an independent task force to carry out a comprehensive forensic audit over public debt and report to us in the next three months," he said.
The audit will provide clarity on the extent and nature of the debt, how public resources have been expended and recommend proposals for managing the public debt in a sustainable manner.
Ruto said the consequence of withdrawing the Finance Bill, 2024, is the reduction of the revenue target by Sh346 billion.
"Over the last few days, our treasury team has been assessing the adhere impact of either reducing the budget by Sh346 billion in full or borrowing the Sh346 billion in full," he said.
The President said they ended up realising that cutting the entire amount would drastically affect the delivery of critical government service while borrowing in full would occasion a fiscal deficit by a margin that would have significant repercussions on many sectors.
The sectors include Kenya's exchange rate and interest rates.
"We have since after expensive consultations struck a middle ground and we will be proposing to the National Assembly a budget cut of Sh177 billion and borrowing the difference," he said.
"Whatever we will borrow will increase our fiscal difference from what I intended to be 3.3 per cent of our GDP. It will now go up to 4.6 per cent of GDP, still lower than last year."
Ruto said the amount will be used to fund critical government services and funding for critical areas including the hiring of Junior Secondary School (JSS teachers) and intern doctors, funding the milk stabilisation program, reviving stalled road projects, retaining subsidised fertiliser program, settling the debt owed to farmers in the coffee sector, capitalising the coffee cherry fund.
Others are enabling public-owned sugar mills to pay outstanding debts to sugarcane farmers, additional funding for higher education new funding model, and settling arrears owed to counties, NG-CDF and pensions.
