NAIROBI, (Xinhua) --
Kenya plans to intensify fiscal consolidation in
the medium term in order to reduce the risk of a public debt
distress, a government official said on Wednesday.
Julius Muia, the
Principal Secretary in the National Treasury, said the public
debt currently stands at about 58 percent of the Gross Domestic
Product (GDP) which is below the International Monetary Fund (IMF)
threshold level of debt distress.
“In order to ensure
that public debt remains sustainable, the government will
continue with fiscal consolidation to contain the budget deficit
within reasonable limits,” Muia said.
Data from the
National Treasury indicate that approximately 6.5 billion U.S.
dollars was allocated for the repayment of public debt in the
2017/2018 financial year, up from 4.3 billion dollars in the
previous financial year.
Muia said the
government is therefore keen to reduce the quantity and ratio to
GDP of the public debt in order to avoid crowding out the
private sector in the credit market.
He said public debt
levels have been on the increase in the past decade due to the
need to bridge infrastructure deficit.
He said the bulk of
the national debt has been incurred to finance infrastructure
projects for the national development blue print Vision 2030.
He noted that 70
percent of the country’s infrastructure projects will be
financed by the private sector but the government will be
required to put upfront investment in order to de-risk the
The PS said Kenya
has maintained prudent macro-economic policies to ensure that
public debt is used for public investment and not for
He observed that the
borrowed funds have also been used to create employment
opportunities as well as open up remote areas for further
private sector investments.