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{
    "id": 1438660,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1438660/?format=api",
    "text_counter": 148,
    "type": "speech",
    "speaker_name": "Prof. Njuguna Ndung’u",
    "speaker_title": "The Cabinet Secretary for the National Treasury and Economic Planning",
    "speaker": null,
    "content": "billion or 15.7 per cent of GDP. The development expenditures including allocations to domestic and foreign finance projects, Contingency Fund and even Equalisation Fund is Ksh707.4 billion, which is equivalent to 3.9 per cent of GDP. Total allocation to county governments is projected at Ksh444.5 billion, of which equitable share is Ksh400.1 billion. Given the projected revenue grants against the projected expenditures, the fiscal deficit, including grants, is projected at Ksh597 billion, which is equivalent to 3.3 per cent of GDP. This is down from Ksh925 billion, or 5.7 per cent of GDP in 2023/2024. In this respect, the primary balance will improve to a surplus of 2.3 per cent of GDP from a deficit of 0.4 per cent of GDP in the current financial year. The fiscal deficit for 2024/2025 will be financed by net external borrowing of Ksh333.8 billion, which is equivalent to 1.8 per cent of GDP, and net domestic borrowing of Ksh263.2 billion, which is equivalent to 1.5 per cent of GDP. On public debt management, I want to state that Kenya meets its obligations promptly and no debt arrears have been accumulated. Public debt is projected to remain within sustainable levels on account of fiscal consolidation path that reflects the decline in the ratio of debt to GDP, in present value terms over the medium-term. To improve Kenya's debt sustainability and boost our credit rating position, the Government will continue to implement measures to enhance the growth of foreign exchange earnings. Our medium-term debt management strategy aims at lowering the costs and risks in debt portfolio. In this regard, the Government will slow down uptake of new external commercial debt and undertake liability management operations through debt swaps and other innovative solutions. The Government will also diversify sources of financing through issuance of Panda, Samurai and Sukuk Bonds in diverse financial markets in China, Japan and the Gulf regions, respectively. The Government will maximise use of concessional financing from bilateral and multilateral institutions to improve debt sustainability and boost our credit rating. Let me turn to Public Private Partnership framework. Due to the limited fiscal space, the Government will continue to scale up the use of Public Private Partnership (PPP) financing for commercially viable projects. Currently, there are 37 projects at various stages of the PPP project cycle. In order to enhance viability of PPP projects, I will soon be proposing amendments to the Public Finance Management (PFM) Act, 2012 to speed up the process of financial close as well as ensure that related fiscal cost and contingent liabilities are within acceptable levels. Let me now turn to Public Investments Management. In order to increase efficiency and effectiveness of public spending, the Government will continue to implement Public Investment Management Regulations at the National Government and commence a roll-out to county governments. The Regulations are aimed at streamlining initiation, execution and delivery of public investment projects within the timelines. Further, the Government will roll-out Public Investment Management Information System to all Ministries, Departments and Agencies (MDAs) to improve the management of development projects in the country. Strengthening public finance management reforms is very critical. Hon. Speaker, I will now turn to migration to accrual accounting. The transition to accrual accounting from cash basis marks a significant milestone in our nation's journey to strengthening public finance management. In recognition of this, the Cabinet in March 2024 approved the transition from cash to accrual basis of accounting to improve cash management and enhance the financial and fiscal reporting. Accrual accounting will enable the Government to account for all assets and liabilities, including all Government assets, and we will also be able to account for all pending bills, public debt and pension liabilities. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}