Auditors general’s report reveals why Kenya government is broke! This is according to the financial year 2015-2016. The government was caught up in unending borrowing spree which gives the reason why the Kenya government is broke!
From the financial audit report, the national government cannot account for Ksh 40.2 billion. These leads credence as to why the broke treasury opts for shs80 billion budget cuts.
With the revenues shrinking and the Government running out of funds but to borrow more funds, and expensive budget beckons now instituting tough austerity measures.
The treasury Cabinet Secretary Henry Rotich(pictured, center) said yesterday that they need to reduce county budget up to sh18 billion as the Treasury prepares for a second supplementary budget which is why the Kenya government is broke! by targetting national budget cuts up to sh60 billion.
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Rotich who was speaking before the Senate Finance and Budget Committee, which demanded to know why Treasury had not released money to counties.
He said, “If you tell us to disburse 100% funds, the Judiciary, executive, and Parliament also want their full share and I can’t get the revenues and you do not want me to touch borrowing, it’s impossible, I mean something must give .”
The treasury now is tucked between a rock and a hard place and has resolved to cut the budget by over sh 80 billion for the first time as ambitious tax targets fall below par.
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Kamau Thugge, Principal Secretary admitted why the Kenya government is broke! Because Kenya has hit its maximum stock of debt this year and needs to refocus on climbing up the money graph.
According to the economist, see debt as a cycle where you get a boom when money comes in but a rough patch when you have to pay, a pain treasury has been avoiding as it took more loans to pay older loans rather than rely on organically generated revenue this why Kenya government is broke!
When the year started (2018) the government projected that it could raise a total of sh 1.7 trillion towards funding the hs 2.2 trillion expenditure, that seen the fuel goes up time and again
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The taxman was to collect sh 1.5 trillion while ministries, department, and agencies were to collect sh 156 billion a kitty referred to as Appropriation-in-Aid. Now the government will have new mechanisms to get the tax from the citizens through observance of the law and if broken a bond to be high.
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Under a period review ministries where behind schedule by sh 3.5 billion. So why the Kenya government is broke! is treasury had promised to reduce the gap between what the county borrows and what it spends to 3% of the Gross domestic product but has been unable to bring it down below 8% of the GDP or about sh 600 billion marks.It explains it roughly why the Kenya government is broke.
Rotich said,”We have to tighten expenditure for the national government and we need to talk to county government to institute also.Every institution needs to tighten its belt.”
Makuen Senator, Mutula Kilonzo Jr said: “The government is being insincere when Deputy President William Ruto promised governors more money only for Treasury to come and target cutting the budget that had even been disbursed yet treasury, for the better part of this year, delayed disbursement to counties.”
Supermarkets, businesses, and Banks are closing as privatizations knocks, reading wide on why Kenya government is broke. Rotich said, so far only sh134 billion of the sh302 billion to be given to the devolved units had been disbursed. So the question is for how long will the taxpayers be kept in a maze on why Kenya government is 80 billion broke?