Govt sets aside Shs10.5tri of its budget to service national debt

Thegovernmentexpects to spend 10.48 trillion from its 2020/21 budget to for reimbursement of the nationwide debt. The government has increased its 2020/21 budget by 5 per cent to Sh34.88 trillion from Sh33.1 trillion for the current financial year.

The debt servicing allocation within the 2020/21 finances, is equal to 84.58 per cent of the Sh12.39 trillion for recurrent expenditure and development of the ministry of finance for the approaching monetary fiscal. According to Finance Minister, Dr. Philip Mpango, the 

recurrent finances could be Sh11.37 trillion; means the debt servicing will consume 89.3 per cent of the budget. 

The government also expects to spend Sh750.3 billion different expenditure and Sh510 billion for salaries as well as Sh659 billion. 

In addition, development expenditure includes Sh624.7 billion from domestic sources and Sh34.61 billion from external sources. 

Due to the authorities’ information, the money expected for debt repayment for this year is Sh4.29 trillion greater than the amount spent for the financial year 2019/20 as at March 2020. 

While after the government’s Sh34.88 trillion budget for 2020/21 fiscal year, the arrears allotment will hence consume over 30 per cent of all they year’s revenue and expenditure plan. 

Dr. Mpango exposed that within the 2019/20 monetary year, the government spent Sh6.19 of its Sh33.1 trillion to service the national debt. The debt expenditure for that year was 18.70 per cent of the full finances. The determined will thus bounce up by 11.3 per cent this year. 

He pointed out that the government disbursed Sh597.54 billion as of March 2020 for servicing money it owed contractors, suppliers, service suppliers and public servants.