Latest data from the Central Bank of Kenya (CBK) shows that the stock of domestic debt stood at Sh2.154 trillion on September 15, up from Sh2.118 trillion at the beginning of the month. The new borrowing was largely on the Treasury bond account, where the outstanding stock rose by Sh31.3 billion to Sh1.37 trillion in the two week period.
The outstanding stock of Treasury bills also rose, by Sh6.3 billion to Sh727.9 billion. The stock of debt is likely to go higher in coming weeks, given that the Treasury is already behind its domestic borrowing target and maturities on Treasuries will be lower in October compared to recent monthly averages.
“The government is behind its domestic borrowing target for the current fiscal year, having borrowed Sh32.7 billion, against a target of Sh73.3 billion—assuming a pro-rated borrowing target throughout the financial year of Sh317.7 billion budgeted for the full financial year,” said Cytonn Investments analysts in a weekly markets note.
Last week, the Cabinet settled on a Sh10 billion allocation to the Independent Electoral and Boundaries Commission (IEBC) to fund the repeat poll, even though the body had requested Sh12 billion while the Treasury had estimated that it would take up to Sh15 billion to finance the exercise.
The supplementary budget requirement has raised the need to borrow more given that the government’s revenue collection for the year starting July is behind target by Sh29 billion, according to the Treasury.
The revenue target is Sh1.54 trillion for the fiscal year.
Compiled by Collins Gathogo.