Ndindi Nyoro Blasts Treasury Over Serious Revenue Shortfalls and Debt Accumulation

The National Assembly Budget Committee Chairperson Ndindi Nyoro delivered a scathing critique of the National Treasury during the Budget Appropriations hearing on Wednesday.

The lawmaker condemns the government's failure to meet revenue projections and establish clear budgetary objectives. Nyoro's remarks expose the government's persistent financial challenges, particularly the consistent underperformance in revenue collection and an overreliance on recurrent expenditure at the expense of developmental initiatives. Drawing attention to a decade-long pattern of fiscal inefficiency, Nyoro highlights that ordinary revenue has been consistently achieved at merely 67 percent of targeted levels.

This systematic shortfall has compelled the government to increasingly resort to borrowing, despite mounting public pressure to curtail such practices. The Treasury's September report in the 2024 Draft Budget Review and Outlook Paper confirms these concerns, revealing a substantial revenue shortfall of Sh172.1 billion with actual collections reaching Sh2.29 trillion against a targeted Sh2.46 trillion. The fiscal challenges are further underscored by Kenya's escalating public debt, which had reached approximately Sh10.6 trillion as of July 2024.

Treasury Principal Secretary Chris Kiptoo acknowledges the revenue collection discrepancies, noting consistent monthly shortfalls: Sh35 billion in July, Sh25 billion in August, and Sh10 billion in September. In response to these challenges, Kiptoo expresses optimism about future improvements. He commits to implementing more rigorous financial management strategies, including a fundamental shift in fund allocation mechanisms.

Government departments and agencies will now be required to provide comprehensive expenditure justifications, moving away from the previous system of automatic funding. Kiptoo also indicates collaborative efforts with the Central Bank to reduce borrowing costs and align economic indicators more effectively. The Treasury also aims to address the structural inefficiencies that have perpetuated Kenya's fiscal vulnerabilities, signaling a potential turning point in the country's financial management approach.