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Kenya to ditch wide fiscal deficits, finance minister says

Kenyan Finance Minister Ukur Yatani in Nairobi, Kenya, September 12, 2019. PHOTO BY REUTERS/Njeri Mwangi

15/01/2020

NAIROBI (Reuters) - Kenya will no longer set wide budget deficits and will focus on raising funds through revenue collection and minimal borrowing, the finance minister said on Wednesday.

President Uhuru Kenyatta's government has been criticised for saddling the country with a heavy debt load in recent years. The government was forced to raise its borrowing ceiling last year after it breached the set level.

Ukur Yatani, who was confirmed as the finance minister on Tuesday after acting in the role since last July, said the room for budget deficits, which have been above 6% of GDP in recent years, had long closed.

"We are going to cut our cloth according to our size," he told a meeting to prepare the government's 2020/21 budget.

He warned that sources of plugging the deficits "are either exhausted" or "on edge". "The government will continue to pursue the fiscal consolidation policy."

(Reporting by Duncan Miriri; Editing by Andrew Heavens and Andrew Cawthorne)