Tough times ahead as country’s resources are used in offsetting accrued debts

Kenyans advised to brace themselves for tough times ahead as the economy takes a dip.

Photo/Courtesy

In Brief

Massive debt accrued by the government hurts the economy

– Other factors hurting the economy include; the poor performance of the agricultural sector and declining domestic exports of major agricultural projects.

– Recommendation is to increase development projects that can grow the economy and change treasury budgetary policy

Massive debt accrued by the government and under-performing revenues both in the national and county governments means Kenyans have a gloomy economic future, the Parliamentary Budget Office(PBO) has warned.

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A statement by National Treasury on revenues and exchequer issues published in July 2019 month’s Gazette notice showed that the country incurred Sh975.8 billion loans in the 2018/19 financial year which has since increased.

On Tuesday The Cabinet Secretary Treasury, Ukur Yatan told Parliament that he is left with no option but to cut a further Sh161 billion from development budget to plug budget hole.

This move will hurt the economy as there will be no development that will help grow the economy.

The hit is already being felt with rise in the cost of living and basic commodity like tomatoes. Currently, the cost of a crate of tomatoes goes for 3500 shillings from the usual 1500-1800 range.

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This situation has made many Kenyans who want to use tomatoes to buy 3 medium-sized tomatoes at 50 shillings which is so costly. As a result of this, most Kenyan have had to improvise or not use tomatoes at all in there cooking.

In a report released by PBO titled ‘The Shuteye Economy: Unpacking the 2020-21 Budget Policy Statement, the office said Kenya has in the recent years failed to hit growth targets and the trend is expected to worsen. this has been attributed to by the poor treasury policy which they recommended that needed to change for better performance.

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The report said the economic growth stagnation that began in 2013 will persist because of debt and the under-performance of the agricultural and tourism sectors.

Apart from the massive debts accrued, some of the factors that have led to the sharp economic decline in the country include; the poor performance of the agricultural sector and declining domestic exports of major agricultural projects, said Phylis Makau, head of Parliamentary Budget office.