Kenya's parliament has passed the biggest budget in the country's history for the financial year 2023/24 which begins on 1 July, estimated to cost KSh3.68 trillion (approximately $26Bln). This represents an increase of about KSh380Bln ($3Bln) on the previous year's budget of KSh3.3 trillion ($23Bln).
The Executive branch of the government was allocated KSh2.1 trillion ($15Bln), Parliament KSh40Bln ($285Mln) and the Judiciary and Judicial Service Commission got KSh22.9Bln ($163Mln). The development budget has been set at KSh718.9Bln ($5Bln), reflecting the administration's focus on infrastructure and other growth-oriented projects.
The government's budget was presented to parliament by Cabinet Secretary for the National Treasury Njuguna Ndung'u. While addressing Kenya's parliamentarians, the minister noted that the country's economy is gradually recovering as projected economic growth is expected to exceed 5 percent.
"The economy is expected to rebound and expand by 5.5 percent in 2023 from 4.8 percent in 2022 and it will be supported by private sector-led growth including strong performance of the services sector," he said.
As for sector allocations, the largest share was given to the education sector, with KSh630Bln (about $4.5Bln) dedicated to enhancing the nation's schooling system. The government also introduced new funding for university education.
In the budget speech, Ndung'u touched upon Kenya's high debt as one of the economic challenges facing the country, along with the rising cost of living, a weakened shilling exchange rate against the US dollar, increased food and fuel prices. This year's budget allocation to settle public debt stands at KSh1.6 trillion ($11Bln).
"Kenya's public debt remains sustainable, but with elevated risks of debt distress because of persistent global shocks that adversely affect the liquidity ratios," Ndung'u said, adding: "Although the debt burden has risen [...], the government is committed to honor all public debt obligations as they fall due."
The minister explained that further depreciation of the national currency increased the size of the public debt stock as half of the debt is denominated in foreign currencies.
The 2023/24 budget is partly set to be financed by a battery of new taxes that range from fuel and food to beauty products, crypto currencies and social media influencers. The proposed new taxes are expected to generate KSh289Bln ($2Bln). According to President Ruto, the 2023 Finance Bill will stimulate the country's economy, help solve unemployment, boost citizens' incomes and tackle problems that face ordinary Kenyans.
However, the introduction of new taxes, as well as growth in existing ones, sparked discontent among Kenyans, with protesters organizing demonstrations against the decision in Nairobi.
Furthermore, the present administration has been subject to growing criticism because of its failure to curb the rising cost of living. During the budget presentation, several opposition parliamentarians left the room reportedly to express their disagreement with the text.