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The Office of the Controller of Budget is concerned about the rising public debt, which climbed to 5.1 per cent of the nation’s gross domestic product (GDP), up from Sh2.36 trillion recorded in June 2014 to Sh2.48 trillion as at December.

According to the Controller of Budget Ms Agnes Odhiambo, the rising public debt is likely to push up interest rates and inflation, and in the long run overburden the country’s future generation. “It is therefore recommended that, the National Treasury should take steps to ensure that public debt does not reach unsustainable levels in view of the Constitutional provisions allowing county governments to borrow,” she reckoned in her report released early this week. Kenya’s current account deficit as at April 2012 amounted to $232 million, about 13 per cent of the GDP, the second highest deficit in the world after Mongolia with 15.1 per cent, according to the report. In her National Government Budget Implementation Review Report, Odhiambo flagged the National Government for low absorption of recurrent and development expenditures. She noted that absorption rate of recurrent and development expenditure stood at 39.8 per cent and 26.1 per cent respectively, in the ministries, State departments and agencies.


The report attributes the low absorption to delay in release of funds by the National Treasury, particularly in the first-quarter of the year and the lengthy procurement process. County Governments, the report indicates, are faced with similar problems, forcing the Council of Governors through its chairman, Bomet Governor Isaac Ruto, to accuse the Treasury of impeding smooth running of devolution by delaying funds transfer. Odhiambo has petitioned Treasury to timely release both recurrent and development funds and re-align the releases to work plans. “Parliament should expedite passing of the Public Procurement and Asset Disposal Bill, 2014 to streamline procurement processes,” she recommended in her report.

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