Kenya Vows Brutal Travel Cuts as $3.6 Billion's Projects Stall
Kenya Vows Brutal Travel Cuts as $3.6 Billion of Projects Stall
(Bloomberg) -- Kenya’s acting treasury secretary vowed to cut spending on non-capital items including travel as the East African nation tries to balance completing projects that have stalled with narrowing its budget deficit.
The government targets a budget gap of 3.5% of gross domestic product by 2022-23 from an estimated 7.7% in the fiscal year that ended in June, Ukur Yatani said Thursday in the Kenyan capital, Nairobi. “The cuts will be brutal,” he said.
Projects worth 396.9 billion shillings ($3.6 billion) in Kenya have stalled as of June 2018, National Assembly budget committee chairman Kimani Ichung’wah said at the same meeting on spending plans. The implementation of projects such as construction of roads, rail links and dams was halted partly because the government stopped disbursing funds.
The government will shrink its delegations to foreign conferences and reduce the amount of money it spends on printing, advertising and office supplies, Yatani said later by phone. There will be immediate savings of 21 billion shillings from recurrent-expenditure cuts and 25 billion shillings from the development budget, he said. The savings will be used mainly to complete projects that were halted before investing in new ones.
The cabinet on Thursday approved 6.9 billion shillings for infrastructure that will support the development of a special economic zone and completion of a phase of a railway partly funded by China.
The government forecast its economy will expand by 6% this year and 6.2% in 2020, driven by its so-called Big Four Agenda that’s focused on investing in manufacturing, housing, farming and healthcare. Risks to the growth outlook as the U.S.-China trade war and Brexit because those are some of the top markets for Kenya’s farming produce.
To contact the reporter on this story: David Herbling in Nairobi at dherbling@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Rene Vollgraaff
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