Kenya, without donor aid, will enter into heavy domestic borrowing to bridge a four-percent budget deficit, Finance Minister Christopher Obure said in budget proposals tabled in parliament here on Thursday.
Presenting the budget for the fiscal year 2002/03, Obure said the government had been compelled to heavy domestic borrowing due to lack of donor aid caused by a strained relationship with the International Monetary Fund (IMF) and the World Bank.
Unlike last year, the government has presented its budget without any significant input from the donor community after the IMF and the World Bank again froze aid to Kenya in January 2001, pegging it on conditions which the government has yet to fulfil, such as eradication of corruption, prosecution of corrupt top government officials and the sale of state firms.
Obure said the government’s 277,7-billion shillings ($3,5-billion dollars) gross recurrent expenditure for the next fiscal year will be financed directly from the Consolidated Fund Services.
He said the country’s economy is projected to grow by between 2 and 3,9%, compared to 1,6% growth in 2001/02, due to increased investments and sustained macro-economic stability.
Apart from the treasury bills, the minister sought to cover the deficit in government expenditure by raising customs and excise duties, which he said will create an additional 3,3-billion shillings.
Duties for used imported motor vehicles between five and 10 years old will be surcharged between 30 000 to 60 000 shillings per unit, while going up by five percent on mobile telephone air-time tariffs. – Sapa-AFP