According to the National Treasury Cabinet Secretary(CS) Njuguna Ndung’u, the government spends at least Kes50 billion weekly to pay maturing public debts.
Appearing before the Senate County Public Investment and Special Funds committee on Tuesday, he said the payments have occasioned a biting cash crunch in the country, resulting in delayed salary payments for civil servants.
The National Treasury still needs to remit nearly Kes97 billion owed to county governments for January, February and March.
Further, he said in March alone, the total public debt maturities hit Kes147 billion.
The CS explained how the maturities affected the local economy, stating that as most of the loans that became due were domestic, the national treasury had to settle local debts to boost the local economy.
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He explained to the committee chaired by Vihiga Senator Godfrey Osotsi that interest payments to domestic creditors accounted for a major portion of the debt obligations for March.
“The lumped-up maturities without corresponding exchequer receipts have led to the financial constraints that have hit the government,” said Ndung’u.
He said the economy is facing a perfect storm, with missed growth targets worsening revenue shortfalls and the prevailing tough times.
Moreover, he explained that public investments, the key growth drivers, have slowed down.
Data from the Treasury shows that the debt-servicing budget is Kes1.36 trillion, down from the Kes1.39 trillion budget set aside for servicing debts by former President Uhuru Kenyatta’s administration.
In January, the government spent Kes123.53 on debt obligations; in February, it forked out Kes66.7 billion.
