Kenyan shilling's appreciation sees debt service expense drop by Sh66.2bn
By Alfred Onyango |
Debt servicing expenses for the FY 2023/24 will amount to Sh1.8 trillion, or 90 per cent of the overall consolidated fund expenditures.
The strengthening of the Kenyan Shilling against the US dollar in three months from February this year has done enough to ease government pressure on debt service costs.
According to the Supplementary Budget II, 2023/24 and the 2024/25 Budget Estimates tabled in Parliament last week by the Public Debt and Privatisation Committee, the shillings appreciation resulted in a total decrease in debt service by Sh66.2 billion.
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"Therefore, debt servicing expenses for the FY 2023/24 will amount to Sh1.8 trillion, or 90 per cent of the overall consolidated fund expenditures," the report reads.
"Consequently, the consolidated fund services expenditures under Supplementary Estimates II will amount to Sh1.99 trillion, depicting a decline from Sh2.08 trillion indicated in Supplementary Estimates I."
A consolidated fund ideally is the main bank account of the government which general taxation is paid into. The government's general spending is also paid out of the fund.
The Kenyan Shilling has been on a gaining streak since February this year after it hit a low of 161 in late January.
Since it started gaining sometime in February, it has gained about 32 unit values, with the Central Bank of Kenya quoting the exchange rate at 129.39 on Monday.
The strengthening of the Kenyan Shilling was attributed to the successful settlement of the inaugural $2 billion buyback plan, where the government paid back $1.5 billion in February, boosting investor confidence.
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