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{
    "id": 1590957,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1590957/?format=api",
    "text_counter": 172,
    "type": "speech",
    "speaker_name": "Hon. John Mbadi",
    "speaker_title": "The Cabinet Secretary for the National Treasury and Economic Planning",
    "speaker": null,
    "content": "On fiscal deficit and financing, Hon. Speaker, the resultant fiscal deficit including grants is projected at Ksh923.2 billion, equivalent to 4.8 per cent of GDP down from the estimated Ksh997.5 billion or 5.7 per cent of GDP in Financial Year 2024/2025. The fiscal deficit for the Financial Year 2025/2026 Budget will be financed by net external borrowing of Ksh287.7 billion which is equivalent to 1.5 per cent of GDP and net domestic borrowing of Ksh635.5 billion, which is equivalent to 3.3 per cent of GDP. On public debt management, Kenya’s public debt is projected to remain within sustainable levels over the medium term. In present value terms, the debt to GDP is projected to progressively decline from 63.0 per cent in 2024 towards the debt anchor of 55 per cent or plus or minus 5 per cent of GDP by 2028. To support the projected decline in debt levels, The National Treasury will continue implementing various reforms as guided by the Medium-Term Debt Management Strategy including Liability Management Operations, continue pursuing the use of concessional loans from multilateral, bilateral and limited commercial sources such as international bond issuances. Additionally, reforms targeted to support domestic market development will eventually reduce the cost of public debt while sustaining fiscal consolidation efforts to ensure debt remains within sustainable levels. Further, the Government will explore emerging funding instruments such as debt swaps, diaspora bonds, sustainability-linked bonds and Environmental, Social and Governance Debt instruments to fund budget deficits and manage public debt. This strategic approach will not only diversify our financing options but also strengthen international partnerships and promote sustainable growth. Hon. Speaker and Members, the Government is keen on sustaining transparency and improving efficiency in public debt service. To this end, The National Treasury is in the process of integrating the Commonwealth Meridian Debt Management System with the Integrated Financial Management Information System (IFMIS) and the core banking systems of the Central Bank of Kenya (CBK). On the PPP framework, Hon. Speaker, the Government continues to strengthen the role of PPPs in financing our development agenda. Currently, there are 32 PPP projects at various stages which are targeted to mobilise Ksh70 billion in the Financial Year 2025/2026 through private investments in priority sectors including energy, water, housing, health and transport. To enhance transparency and accountability at all stages of the project lifecycle while implementing PPP, I recently issued a circular on mandatory disclosure requirements for all Privately Initiated Proposals. This measure is part of our broader effort to strengthen the integrity of the PPP program and to ensure that private sector participation in public projects fosters public trust. Hon. Speaker, The National Treasury and Economic Planning in May 2025, received the final Report of the Committee of Experts on Leveraging Local Financial Markets for Investment into Public Private Partnerships Implementation. The Committee recommended the establishment and operationalisation of the PPP Implementation Trust Fund (PPP-ITF) as the central mechanism for enhancing private sector participation in PPP, particularly through institutional and retail entities. Additionally, the PPP Regulations under consideration by Parliament will enhance clarity around PPP processes, thereby, enhancing efficiency and project delivery. This will also unlock a pipeline of county-level specific PPP projects in partnership with development partners. To strengthen public finance management reforms and management of public resources, all MDAs adopted accrual accounting as of 1st July 2024. The first accrual-based financial statements are expected for the Financial Year ending 30th June 2025, which is a few days away. The accrual accounting will enable the government to account for all assets and 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."
}