Kenya budget to tackle debt, protect economy, finance minister says

Kenya's Finance Minister Njuguna Ndung'u. PHOTO/ NMG

What you need to know:

  • Kenya's economy is largely driven by agriculture, manufacturing, transport and storage, financial and insurance services and real estate.
  • In April, the finance ministry forecast economic growth to increase to 5.5% this year from 5.6% in 2023.

Kenya's 2024/25 budget will aim to tackle its debt while protecting its fragile economic recovery at the same time, Finance Minister Njuguna Ndung'u said on Thursday.

In April, the finance ministry forecast economic growth to increase to 5.5% this year from 5.6% in 2023.

Ndung'u is due to present the budget later to parliament.

"The budget today is going to emphasise on the policies that we need to strength to implement ... to support that fragile growth, that fragile economic recovery," he told reporters.

"We want to make sure that we revive the economy so that it can generate jobs for the youth. We want to revive the economy so that we can pay our debt. We have been buffeted by that," he added.

Total public debt stands at an estimated 68% of GDP for fiscal 2023/24, and is expected to fall to 64.8% in 2024/25, according to the World Bank.

The East African nation sold a $1.5 billion international bond in February at premium to fund the buyback of a large portion of a $2 billion bond maturing in June.

Before that, investors had feared Kenya might not be able to repay the bond due to its strained public finances.

Kenya's economy is largely driven by agriculture, manufacturing, transport and storage, financial and insurance services and real estate.

Last week, parliament approved overall spending for the year at 4 trillion shillings ($31 billion), up from the 3.75 trillion shillings the minister presented last June for the 2023/24 year. That budget was later adjusted to 3.85 trillion shillings.

The 2024/25 budget will be accompanied by the Finance Bill 2024, a separate law outlining revenue-raising proposals which many critics say some could cripple sectors including financial and internet services, transport, manufacturing and retail.

Last week, the central bank governor said Kenya will use part of a $1.2 billion World Bank budget support loan to make a payment of roughly $500 million on a Eurobond maturing this month.