NAIROBI, Feb 3 The Kenyan government plans to float another international bond this year.
National Treasury Cabinet Secretary Henry Rotich in the draft 2016 Budget Policy Statement says the government is considering three options comprising a Sharia compliant Sukuk bond, Samurai bond in the Japanese market or a Diaspora bond targeting Kenyans living or working abroad.
The government has invited stakeholders to forward their views on the draft 2016 Budget Policy Statement by end of Wednesday.
According to the 2016 draft budget policy statement, fiscal deficit including grants is projected to reduce to 500.5 billion shillings representing 6.9% of the GDP in the financial year 2016/2017 against the estimated fiscal deficit of 522.3 billion shillings representing 8.1% of the GDP in the current financial year.
Of the projected deficit, the government plans to borrow 310.7 billion shillings from external sources and another 189.8 billion shillings in the domestic market.
In the coming financial year, total expenditure and net lending are projected to top 2.07 trillion shillings up from an estimated 1.9 billion shillings in the current financial year. Recurrent expenditure is also set to increase to 1.09 trillion shillings from 989.7 billion in the 2015/2016 financial year.
The National Treasury is also banking on the ongoing reforms in the tax policy and revenue administration to push ordinary revenue collection to 1.4 trillion shillings, from 1.2 trillion in current financial year.
The government also insists it remains committed to accessing international capital markets with a view to continued diversification of funding sources for development expenditures while at the same time reducing pressures on interest rates locally.
To that end, even as questions persist over how the 2 billion dollar Eurobond floated in 2014, the National Treasury is not excluding the option of accessing international capital markets to fund infrastructure projects.
In the draft 2016 budget policy statement, the cabinet secretary Henry Rotich says the government is keen from this year to cap the overall fiscal deficit at 6.9 percent, down from the current 8.1 percent of the gross domestic product.
As of September 2015, Diaspora remittances amounted to 128.5 billion shillings.