Government urged to tread carefully on borrowing by IMF

Treasury building Nairobi PHOTO COURTESY

Nairobi, KENYA: The International Monetary Fund has allayed fears that Kenya is headed to a red zone owing to the burgeoning fiscal deficit.

The visiting team led by Kenya representative Jan Mikkelsen told the National Assembly Budget Committee that the current debt is sustainable but warned the government that it bears the responsibility of managing it in terms of new debt levels.

The IMF said that they trust the government will address the issues and continue with the same model to realize the big four agenda.

They said efforts must be made to rescue the fiscal deficit saying the investors are concerned for good reasons as a more are willing to come to Kenya and tap on the potential it wields and achieve the growth objectives.

Committee Chair Kimani Ichung’wa said that the National Treasury is keen on maintaining fiscal deficit within 5 and 6 percent on the next Budget Policy Statement.

He says the fiscal deficit will determine the cash flows in government and domestic borrowing from the local banks.

This comes as Kenya has yet again received Sh200 billion from international lenders in the form of Eurobond, with queries over the previous one yet to be fully addressed.