• This, he said, follows extensive consultation after the National Treasury did an assessment of the impact of forgoing the amount or borrowing.
Image: PCS/FILE
President William Ruto has said that his administration will now send to Parliament budget cuts of Sh177 billion.
This, he said, follows extensive consultation after the National Treasury did an assessment of the impact of forgoing the amount or borrowing.
"Cutting the entire amount would significantly and drastically affect the delivery of critical government services, while borrowing would increase our fiscal deficit by a margin that would have significant repercussions on many other sectors, including interest rates and exchange rates," the President said.
Ruto in a national address on Friday said the borrowed deficit will be used to fund the government's critical areas.
"We have since struck a middle ground and we will be proposing to the National Assembly a Budget cut of not the entire Sh346 billion but Sh177 billion and borrowing the difference," he said.
"Whatever we are going to borrow will increase our fiscal deficit to 4.6 per cent of GDP and will be used to fund some of our critical government services."
These services include Hiring of Junior Secondary School teachers and medical interns, Funding the milk stabilization program for dairy farmers, Reviving the stalled roads program, Retaining the fertilizer subsidy program, Settling debts owed to farmers in the coffee subsector and Capitalizing the Coffee Cherry Fund.
Others are enabling public sector-owned sugar mills to pay outstanding debts to sugarcane farmers for their deliveries, Additional funding for the higher education new funding model, Settling arrears owed to counties, Settling arrears for the NG-CDF and Settling arrears for pensions.