NAIROBI, The Kenyan government is expected to spend 34.7 per cent of its revenue on serviving the oublic debt in the next fiscal year, above the ecommended threshold of 30 per cent, says the Institute of Certified Public Accountants of Kenya (ICPAK).
This is because of the rising public debt and the “lumping” of several loans which are set to mature in the next fiscal year, says the Institute which fears that Kenya may have to default on servicing its debts if the Kenya Revenue Authority (KRA) fails to meet its revenue collection targets.
It is a catch-22 situation for the country as it hurries up to reduce its ballooning public debt but is at the same time finding ityse;f having to allocate more funds than recommended to repay the debt.
Accountants note that debt interest and redemption for the period is projected at 621.8 billion shillings (about 6.028 billion US dollars), up from 466.5 billion shillings in the current fiscal year, mainly because of the maturing of several loans. This is a red flag, especially if KRA fails to meet its revenue collections target.
Accountants are also concerned with the delay in finalizing the audit and verification of assets belonging to counties five years since the process began, and fears that being closer to another election cycle, the exercise may not be completed.
ICPAK says there is need to improve absorption of development expenditure to create more jobs and improve service delivery.
Source: NAM NEWS NETWORK