Why William Ruto said Kenya will borrow KSh 1t after withdrawing Finance Bill 2024

Kenyans have raised concerns over the government's borrowing plans following President William Ruto's statement during a presidential roundtable with journalists.

President William Ruto said the government will have to borrow KSh 1 trillion to finance its expenditure. Photo: William Ruto/Getty Images. Source: UGC

During the engagement, the president painted a bleak future on Kenya's financial state and argued that the withdrawal of the Finance Bill 2024 had taken the country back.

"We have dropped the Finance Bill. What does that mean? It means we have gone back almost 2 years," Ruto said to journalists at the statehouse.

"It means that this year we are going to borrow KSh 1 trillion to be able to run our government," he added.

How much will Kenya borrow to finance budget?

Following the president's statement, many Kenyans have questioned why the government will have to borrow KSh 1 trillion on account of the Finance Bill 2024, which was supposed to raise about KSh 346.7 billion.

While announcing the financial year 2024/25 budget CS for treasury noted that the government had an estimated budget of KSh 3.992 trillion.

The CS further noted that the government expected to raise KSh 3.343 trillion from total revenue collections, including appropriations for aid, in FY 2024/25.

This left the government with a budget deficit of KSh 597 billion. The withdrawal of the Finance Bill 2024 meant that the estimated revenues from the bill would not be collected, which means the deficit grew from KSh 597 billion to KSh 943.7 billion.

Therefore, to fund the FY 2024/25 budget, the government will have to borrow almost KSh 1 trillion unless the government cuts down on allocated expenditures to bring down budget estimations.