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The Government of Kenya is seeking Ksh769 billion from the World Bank to cover the fiscal deficit in the 2024/2025 budgetary allocation.
The fiscal deficit resulted from adjustments in expenditures and revenues in the first supplementary estimates which rose from the previous budget estimates of Ksh597 billion.
The National Treasury in its 2024/25 post-supplementary budget estimated the fiscal deficit at Ksh769 billion which is equivalent to 4.3 per cent of Kenya’s gross domestic product (GDP).
According to the Summary of 2024/2025, the government is awaiting approval of the seventh development policy operation (DPO7) of Ksh97.5 billion facility (USD 755.8 million) from the World Bank Executive Board.
Treasury Cabinet Secretary John Mbadi addressing members at a previous parliamentary committee meeting.
Parliament of Kenya
All relevant reforms were cleared except the Uniform County Procedures Licensing Bill 2023 and the Conflict-of-Interest Bill 2023, promoted by the Ethics and Anti-Corruption Commission (EACC).
The latter is currently at Mediation between the Senate and the National Assembly.
The first corporate review of the DPO6 which was held successfully on January 23, 2024, led to the disbursement of Ksh193 billion (USD 1.5 billion) from the World Bank as budget support.
World Bank Executive Board is expected to approve DPO 7 before the end of the financial year 2024/25.
Overall revenues in the supplementary budget for financial year 2024/25 were projected at Ksh3 trillion an equivalent of 16.9 per cent of GDP.
The National Treasury projected revenues at Ksh2.6 trillion which translates to 14.6 percent of GDP. Treasury projected total expenditures at Ksh3.8 trillion from the budgeted Ksh3.9 billion reflecting overall expenditure cuts of Ksh111.2 billion.
It comes as the National Treasury cabinet secretary John Mbadi on October 31 published an explanatory note on changes proposed to be introduced by the Tax Laws Amendment Bill 2024 and the Business Laws (Amendment) Bill 2024.
The government has been widening its tax bracket in push to close the gap in the budgetary allocations financial year 2024/2025 a move that has received backlash from Kenyans.
The National Treasury offices at Harambee Avenue, Nairobi
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