Kenya Faces Wider Deficit After Third Spending Update

Kenya wants to increase spending for the fiscal year that ends in less than a week, to cover emergency expenditure from the coronavirus outbreak.

The National Treasury’s third supplementary budget that allocates extra spending of 14.4 billion shillings ($135 million) will likely further widen the 2019-20 budget gap from the current estimate of 8.3% of gross domestic product. About half of the new spending will “cater for interventions geared toward addressing the Covid-19 disease,” according to documents that the Treasury submitted to the National Assembly.

While Treasury documents didn’t include an update on revenue and debt estimates, the Parliamentary Budget office’s senior deputy director, Martin Masinde, said the deficit is expected to widen.

Lawmakers, who reviewed this year’s budget for a second time in April, expect to consider the new proposals on Tuesday, according to the budget committee Vice Chairman Moses Lessonet.

Other highlights in the supplementary budget include:

  • Allocation of 2.4 billion shillings to social-housing projects
  • Interior Ministry to get additional 1.8 billion shillings and defense department 1.9 billion shillings
  • Energy Ministry penciled in for 1.16 billion shillings for an electricity transmission line

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