Quarterly Economic and Budgetary Review - Africa Check€¦ · The Quarterly Economic and Budgetary...

Republic of Kenya

THE NATIONAL TREASURY

Quarterly Economic

and Budgetary

Review

Fourth Quarter, Financial Year 2015/2016

Period ending 30th June, 2016

August 2016 Edition

TABLE OF CONTENTS

1.0 RECENT ECONOMIC DEVELOPMENTS ....................................... 1

1.2 INFLATION .......................................................................................................................................... 2

1.3 BALANCE OF PAYMENTS .................................................................................................................... 3

1.4 FOREIGN EXCHANGE RESERVES ............................................................................................................. 5

1.5 EXCHANGE RATES .............................................................................................................................. 6

1.6 MONEY AND CREDIT .......................................................................................................................... 7

1.7 INTEREST RATES ................................................................................................................................ 9

1.8 CAPITAL MARKETS .......................................................................................................................... 10

2.0 FISCAL DEVELOPMENTS ................................................................... 12

2.1 REVENUE .......................................................................................................................................... 12

2.2 EXPENDITURE ................................................................................................................................... 13

2.2.1 Guaranteed Loans to Parastatals 16

2.3 FISCAL OUTTURN ............................................................................................................................. 17

2.3.1. Government Financial Statistics (GFS) 2014 18

2.4 FINANCING ....................................................................................................................................... 19

2.4.1 External Financing 19

2.4.2 Domestic Financing 19

3.0 PUBLIC DEBT ..................................................................................... 21

3.1 OVERALL DEBT POSITION ................................................................................................................ 21

3.2 DOMESTIC DEBT .............................................................................................................................. 22

3.3 EXTERNAL PUBLIC DEBT ..................................................................................................................... 23

3.3.1 External Debt Service 25

FISCAL RESULTS, 2005/06 – 2015/2016 (KSHS. MILLIONS) ..................... 27

BUDGET CENTRAL GOVERNMENT* .................................................... 28

*NATIONAL GOVERNMENT .............................................................................. 28

ii

DISCLAIMER

This review is compiled by The National Treasury. Information contained here may be

reproduced without restriction provided due acknowledgement is made of the source.

Comments, suggestions as well as requests for clarification on information contained in

this report are welcome and should be addressed to the Principal Secretary, The

National Treasury, P.O Box 30007–00100, GPO, Nairobi. or email to:

[email protected]

iii

LIST OF ABBREVIATIONS AND ACRONYMS

A-I-A Appropriation in Aid

CBK Central Bank of Kenya

FISM Financial Services Indirectly Measured

FY Fiscal Year

GDP Gross Domestic Product

IMF International Monetary Fund

KNBS Kenya National Bureau of Statistics

KShs Kenya Shillings

Mn Million

NDA Net Domestic Assets

NFA Net Foreign Assets

NSE Nairobi Securities Exchange

RDL Railway Development Levy

iv

The Quarterly Economic and Budgetary Review Report is Published in

accordance with Section 83 of the Public Finance Management Act, 2012. It

states as follows:

83. (1) An accounting officer for a national government entity shall prepare a

report for each quarter of the financial year in respect of the entity.

(2) In preparing a quarterly report for a national government entity, the

accounting officer shall ensure that the report—

(a) Contains information on the financial and non-financial performance of the

entity; and

(b) Is in a form that complies with the standards prescribed and published by the

Accounting Standards Board from time to time.

(3) Not later than fifteen days after the end of each quarter, the accounting

officer shall submit the quarterly report to the Cabinet Secretary responsible for the

entity and the National Treasury.

(4) The Cabinet Secretary responsible for an entity shall forward a copy of the

report to the Cabinet Secretary and Controller of Budget.

(5) Not later than forty five days after the end of each quarter, the National

Treasury shall—

(a) consolidate the quarterly reports and submit them to the National Assembly

and a copy of the reports to the Controller of Budget, Auditor-General and

the Commission on Revenue Allocation; and

(b) Publish and publicize the reports.

(6) In the case of an entity that is a state corporation, the accounting officer for

the corporation shall submit the quarterly report to the Cabinet Secretary responsible

for the corporation who shall, upon approving it, forward a copy to the Cabinet

Secretary.

v

HIGHLIGHTS OF THE QUARTERLY ECONOMIC AND BUDGETARY

REVIEW: FOURTH QUARTER, 2015/2016

1. Recent Economic Developments

The economy had an improved growth of 5.9 per cent in the first quarter of 2016

compared to a growth of 5.0 per cent in the same quarter 2015. This high growth

in the first quarter of 2016 was supported by positive growths in all sectors of the

economy. The sectors with improved performance were; agriculture, forestry and

fishing (4.8 per cent), mining and quarrying (6.9 per cent), transport and storage

(8.4 per cent), electricity and water supply (8.5 per cent), wholesale and retail

trade (7.3 per cent), accommodation and restaurant (12.1 per cent) and information

and communication (9.7 per cent). However, growth slowed in a number of

sectors including; manufacturing, construction, finance and insurance and real

estate.

2. Total Revenue Collection The National Government cumulative revenue collection including A-I-A for the

period July 2015 to June 2016 amounted to KShs. 1,219.1 billion (equivalent to

18.6 per cent of GDP) against a target of KShs. 1,299.9 billion or 19.8 per cent of

GDP. This represented an underperformance of KShs. 80.9 billion mainly due to

shortfalls in Income Tax (PAYE), A-I-A collection, VAT and Import duty.

3. Government Expenditure and Net Lending The total cumulative expenditure and net lending inclusive of transfers to county

governments for the period ending 30th June, 2016 amounted to KShs. 1,768.5

billion. This was KShs. 275.5 billion below the target of KShs. 2,043.9 billion and

was largely attributed to low absorption levels in operations and maintenance, and

wages and salaries for the National Government. Expenditure on foreign financed

development programmes/projects was below target.

4. Guaranteed Loans

Between July 2015 and June 2016, the National Government paid a total of KShs.

1,050.2 million on account of guaranteed loans against the projected debt service

of KShs. 940.9 million.

5. Overall Fiscal Balance

The cumulative overall fiscal balance, on a commitment basis (excluding grants),

amounted to a deficit of KShs. 549.4 billion (equivalent to 8.4 per cent of GDP),

as at end-June 2016.

6. External Financing

Between July 2015 and June 2016, external financing amounted to a net

borrowing of KShs. 269.9 billion.

7. Net Domestic Borrowing

Net domestic financing amounted to a net borrowing of KShs. 202.3 billion

(equivalent to 3.1 per cent of GDP) in the period ending 30th June 2016.

vi

8. Domestic Debt

Total gross domestic debt stock increased by 27.8 per cent from KShs. 1,420.4

billion as at end-June 2015 to KShs. 1,815.1 billion by the end-June 2016.

9. External Debt

The total external debt stock, including the International Sovereign Bond, stood at

KShs. 1,803.3 billion at the period ending June 2016. The debt stock comprised of

multilateral debt (45.0 per cent), bilateral debt (29.9 per cent), Suppliers Credit

debt (0.5 per cent), and Commercial banks’ debt (24.5 per cent- incl. International

Sovereign Bond)

RECENT ECONOMIC DEVELOPMENTS

1.0 RECENT ECONOMIC DEVELOPMENTS

1. The economy had an improved growth of 5.9 per cent in the first quarter of 2016

compared to a growth of 5.0 per cent in the same quarter 2015 (Chart 1a). This high

growth in the first quarter of 2016 was supported by positive growths in all sectors of the

economy. The sectors with improved performance were; agriculture, forestry and fishing

(4.8 per cent), mining and quarrying (6.9 per cent), transport and storage (8.4 per cent),

electricity and water supply (8.5 per cent), wholesale and retail trade (7.3 per cent),

accommodation and restaurant (12.1 per cent) and information and communication (9.7

per cent). However, growth slowed in a number of sectors including; manufacturing,

construction, finance and insurance and real estate.

Chart 1a: Comparison in GDP Growth Rates.

Source: KNBS.

2. The accommodation and restaurant sector had a significant improvement in growth

to 12.1 per cent in the first quarter of 2016, up from a contraction of 11.4 per cent in the

same quarter in 2015, largely due to the withdrawal of the travel advisories by some key

tourist source countries (Chart 1b).

3. The information and communication sector improved by 9.7 per cent in the first

quarter of 2016 compared to 8.6 per cent growth in the same quarter of 2015. The

sustained growth in this sector has been on account of strong performance in mobile

telephony sub-sector.

4. The electricity and water supply sector growth of 8.5 per cent was primarily due to

increased generation from hydro and geothermal. This was mainly due to favourable

weather conditions experienced during the quarter that necessitated the scaling down of

the more expensive thermal generation in favour of hydro and geothermal generation.

5. The transport and storage sector improved growth of 8.4 per cent in the first quarter

of 2016 from 6.7 per cent in the same quarter 2015 is attributed to the declining

international oil prices that resulted to lower retail prices for petroleum products leading

to a general increase in commuter services. The volume of cargo handled at the port also

increased during this period.


2

6. Agriculture, forestry and fishing sector recorded an improved growth of 4.8 per

cent in the first quarter of 2016, boosted by improved crop and livestock production

against a backdrop of good weather and abundant rainfall. The total value of export

earnings from horticulture, coffee and tea also increased as a result of improved

international prices.

7. The construction sector recorded a growth of 9.9 per cent on account of the on-

going public infrastructure projects and private sector development in the real estate

sector and is mirrored in the increased cement consumption and expansion of credit to the

sector by commercial banks.

8. Financial sector recorded a growth of 8.0 per cent in the first quarter of 2016

compared to a growth of 10.6 per cent registered in a similar period of 2015. This growth

may partly be explained by the continued vibrancy of the financial sector evidenced by

impressive financial results posted by most financial institutions and an increase in

domestic credit to both the National Government and the private sector.

9. The manufacturing sector registered a slow growth of 3.6 per cent in the first

quarter of 2016 despite a considerable drop in international oil prices. The growth in the

sector was dampened by a decline in the manufacture of soft drinks, textiles and clothing

and assembly of motor vehicles.

Chart 1b: Sectoral GDP Growth in Quarter 1 of 2016

Source: KNBS

1.2 Inflation

10. Overall month on month inflation increased to 5.8 per cent (within target range) in

June 2016 from 5.0 per cent in May 2016 (Chart 2) due to the increase in the prices of

food and non-alcoholic drinks, alcoholic beverages, tobacco and narcotics as well as the

increased cost of house rents and kerosene despite the notable fall in the price of cooking

gas. In addition the increase in pump prices of petrol and diesel led to the increase of the

Transport index.


3

11. On average, the annual inflation rate stood at 6.5 per cent in June 2016 compared to

6.6 per cent in June 2015.

Chart 2: Inflation

Source: KNBS

1.3 Balance of Payments

12. The overall balance of payments position improved to a deficit of US$ 589 million

in May 2016 from a deficit of US$ 1,129 million in May 2015 (chart 3). The year on year

improvement in the balance of payments position was largely driven by improvements in

the current account deficit.

Chart 3: Balance of Payments (Per cent of GDP)

Source: CBK

13. The current account balance improved to a deficit of US$ 3,204 million in May

2016 from a deficit of US$ 5,736 million in May 2015(Table 1). This is attributable to a

30.4 percent improvement in the trade deficit reflecting a decline in imports of goods as

well as improved earnings from increased exports of goods. As a share of GDP, the

current account deficit improved to 5.1 per cent in May 2016 from 9.3 per cent in May

2015.


4

Table 1: Balance of Payments (US$ Million)

ITEM

Year to

MAY

2015

Year to

MAY

2016

Absolute

Change

Percentage

Change

A. Current Account, n.i.e. (2+(g-h)) -5,735.7 -3,203.5 2,532 -44.1%

a. Goods: exports f.o.b. 5,847.5 6,097.1 250 4.3%

b. Goods: imports f.o.b. 17,116.8 14,320.8 -2,796 -16.3%

Mechandise account (a-b) -11,269.3 -8,223.7 3,046 -27.0%

c. Services: credit 4,967.0 4,245.7 -721 -14.5%

d. Services: debit 2,537.6 2,170.9 -367 -14.5%

1. Balance on goods and services (a-b)+ (c-d) -8,840.0 -6,148.9 2,691 -30.4%

e. Primary income: credit 308.7 327.0 18 5.9%

f. Primary income: debit 767.4 784.8 17 2.3%

2. Balance on goods, services, and primary income (1+(e-f)) -9,298.6 -6,606.7 2,692 -28.9%

g. Secondary income, n. i. e.: credit 3,628.2 3,461.8 -166 -4.6%

h. Secondary income: debit 65.4 58.5 -7 -10.5%

B. Capital Account, n.i.e. 225.7 301.9 76 33.7%

C. Financial Account, n.i.e. -7,098.2 -5,284.6 1,814 -25.5%

Direct investment: net -1,082.7 -1,082.7 0 0.0%

Portfolio investment: net -3,247.7 103.8 3,352 -103.2%

Financial derivatives: net 0.0 0.0 0

Other investment: net -2,767.7 -4,305.8 -1,538 55.6%

D. Net Errors and Omissions -459.7 -1,793.9 -1,334 290.2%

E. Overall Balance (A+B-C+D) -1,128.5 -589.2 539 -47.8%

F. Reserves and Related Items 1,128.5 589.2 -539 -47.8%

Gross Reserves 9,798.7 9,848.8 50 0.5%

Official 7,469.2 8,032.1

Commercial Banks 2,329.5 1,816.7

Imports cover (calender year) 4.6 5.8

Import cover (36 mths imports) 4.7 5.3

Year to May 2016

Source: CBK.

14. The deficit in the merchandise account narrowed from a deficit of US$ 11,269.3 in

May 2015 to US$ 8,223.7 million in May 2016 reflecting a 16.3 per cent decline in the

value of merchandise imports and a 4.3 per cent increase in the value of merchandise

exports (Chart 4). In particular, imports of oil and machinery & transport equipment

declined by 35 per cent and 15.6 per cent, respectively between May 2015 to May 2016,

reflecting low commodity prices in the international market, especially of oil. On the

other hand, merchandise exports increased reflecting increased earnings from coffee, tea,

horticulture, oil products, chemicals and re-exports.

15. In the period May 2015 to May 2016, the inflows from services declined by 14.5

per cent mainly due to lower receipts from transport services. On the positive side, travel

services improved in line with the recovery in tourist arrivals. Remittance inflows

(secondary income) increased by 4.6 per cent in May 2016.


5

Chart 4: Merchandise and Service Account

Source: CBK

16. Financial account flows decreased to US$ 5,285 million in May 2016 compared

with US$ 7,098 million in May 2015. Capital inflows were mainly in the form of direct

investment and other investment which stood at US$ 1,083 million and US$ 4,306

million, respectively in May 2016. Other investment inflows mainly reflect foreign

financing for Government infrastructure projects.

1.4 Foreign Exchange Reserves

17. The banking system’s total foreign exchange holdings increased by 0.5 per cent to

US$ 9,849 million in May 2016 from US$ 9,799 million in May 2015 (Table 2 and

Chart 5). The Official reserves held by the Central Bank (constituting the bulk of the

gross reserves) increased to US$ 8,032 million (5.3 months of import cover) in May 2016

from US$ 7,469 million (4.7 months of import cover) in May 2015. However, reserves

held by commercial banks decreased to US$ 1,817 million in 2016 from US$ 2,330

million in 2015.

Table 2: Foreign Exchange Reserves (US$ million)

May-15 Jun-15 Sep-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16

Gross Foreign Exchange Reserves 9,799 9,473 8,899 9,794 9,629 9,501 9,809 9,818 9,849

Official 7,469 7,212 6,711 7,534 7,481 7,566 7,807 7,986 8,032

Commercial Banks 2,330 2,262 2,188 2,259 2,148 1,935 2,002 1,832 1,817

Import Cover(36 mths imports) 4.68 4.50 4.21 4.77 4.79 4.88 5.05 5.22 5.33

Source: CBK


6

Chart 5: Official Foreign Reserves ((US$ million)

Source: CBK

1.5 Exchange Rates

18. The Kenya Shilling exchange rate has continued to display relatively less volatility

compared with the major regional currencies and depreciated by only 3.5 per cent for the

period June 2015 to June 2016 (Chart 6a). The stability of the Kenya Shilling exchange

rate was supported by a narrowing current account deficit largely due to a lower import

bill, an improvement in earnings from exports and resilient inflows from diaspora

remittances.

19. Further, rising yields on Government securities attracted investor participation as

well as subdued corporate demand for the dollar.

Chart 6a: Performance of selected Currencies against the US Dollar (June 2015 to

June 2016)

Source: Data from Various National Central Banks


7

20. The exchange rate strengthened in June 2016 against major international currencies

as world financial markets came under pressure after the result of Britain’s vote to exit

from the European Union. The currency stabilized at Ksh 101.1 against the US dollar as

of June 2016 compared to Ksh 100.7 in May 2016 (chart 6b). Against the Euro, the

shilling strengthened to Ksh 113.7 in June 2016 from Ksh 114.0 in May 2016 and against

the Sterling Pound, the exchange rate also strengthened to Ksh 144.3 from Ksh 146.3 over

the same period.

Chart 6b: Kenya Shilling Exchange Rate

Source: CBK

1.6 Money and Credit

21. Growth of broad money supply, M3, slowed down from 16.5 per cent in May 2015

to a growth of 8.3 per cent in May 2016 (Table 3). The growth in M3 from May 2015 to

May 2016 was largely on account of an increase in growth of domestic credit to the

Government.

Table 3: Money and Credit Developments, Ksh billion

Source: CBK

22. The NDA of the banking system increased by 7.1 per cent in May 2016 (Chart

7a), from the growth of 15.1 per cent in May 2015. This improved growth is due to a

pickup in the growth of net domestic credit to the Government that more than offset the


8

contraction in the other assets net of the banking system.

Chart 7a: Growth in M3 and Its Sources

Source: CBK

23. Meanwhile, NFA of the banking system grew by 13.8 per cent in the year to May

2016 compared to a growth of 23.2 per cent over a similar period in 2015 following

reduced accumulation of net foreign assets by commercial banks. The foreign assets of the

Central bank increased by an equivalent of Ksh 97.3 billion in the year to May 2016 that

more than offset the decline in the foreign assets of the banking institutions by Ksh 35.8

billion.

24. Domestic credit increased by Ksh 294.5 billion (11.5 per cent) in the year to May

2016 mainly due to increased lending to the Government of Ksh 72.0 billion (14.7 per

cent) and other public sectors of Ksh 2.8 billion (6.1 per cent). Bank credit to the private

sector slowed to a growth of 10.9 per cent in the year to May 2016 from a 20.9 per cent

growth in the same period in 2015(Chart 7b).

Chart 7b: Private Sector Annual Credit Growth.

Source: CBK.


9

25. As shown in Chart 7c, the 10.9 per cent growth of credit between May 2015 and

May 2016 was supported by lending to the main sectors of the economy that increased as

follows during the period: agriculture (22.3 per cent); building and construction (16.1 per

cent); consumer durables (11.6 per cent) and mining (10.6 per cent). The slowdown in

credit uptake by trade (17.3 per cent); transport and communication (16.3 per cent);

finance and insurance (14.4 per cent); manufacturing (11.8 per cent); business services

(10.4 per cent); private households (8.4 per cent) and Real estate (8.0 per cent) sectors

was due to tight credit conditions.

Chart 7c: Private Sector Credit Growth, Ksh Billion

Source: CBK.

1.7 Interest Rates

26. The decline in the overall inflation in the recent months led to the easing of

monetary policy stance in May 2016. The CBR was lowered by 100 basis points to 10.5

per cent from 11.5 per cent. Liquidity conditions in the market have continued to stabilize

resulting in a decline in the interest rates.

27. The interbank rate averaged 4.9 per cent in June 2016 from 3.6 per cent in May

2016 and 3.9 per cent in April 2016 (Chart 8a), liquidity in the money market remained

tight after banks remitted the quarterly tax payments for June 2016.

28. The 91-day Treasury bill rate declined to 7.3 per cent in June 2016 from 8.2 per

cent in May 2016 and 8.9 per cent in April 2016. The 181-day and the 364-day Treasury

bill rate also declined from 10.4 per cent and 11.7 per cent in May 2016 to 9.4 per cent

and 10.7 per cent in June 2016, respectively.


10

Chart 8a: Short-Term Interest Rates

Source: CBK.

29. Arising from an upward revision of The Kenya Banks Reference Rate (KBRR)

from 8.5 per cent in January 2015 to 9.87 per cent in July 2015, average lending rates

increased to 18.2 per cent in June 2016, up from 15.5 per cent in June 2015, while the

deposit rate increased to 6.8 per cent from 6.6 per cent over the same period (Chart 8b).

Consequently, interest rate spread rose to 11.4 per cent in June 2016 from 8.8 per cent in

June 2015. The lending rates are expected to decline in the upcoming months due to the

downward revision of the KBRR to 8.90 per cent in July 2016.

Chart 8b: Commercial Banks Lending and Deposit Interest Rates

Source: CBK

1.8 Capital Markets

30. Activities at the stock market remained fairly stable in the year between June 2015

to June 2016, with the NSE 20 share index recording 3,641 points in June 2016. This was;

however, lower than 4,906 points registered in June 2015 (Chart 9). At the same time,

market capitalisation amounted to Ksh 1,995 billion in June 2016, lower than Ksh 2,274


11

billion in June 2015. The drop in market capitalization in the year to June 2016 is as a

result of a decrease in all equities price indices after the Great Britain voted to leave the

European Union. The spill over effects from global stock markets volatility is expected to

be minimal due to low level of foreign ownership of Government securities and equity

Chart 9: Performance at the NSE

Source: CBK

31. Foreign equity market turnover for the month of June 2016 stood at Ksh 17.2

billion from Ksh 9.7 billion in May 2016, representing an increase of 43.6 per cent.

Bond turnover was Ksh 64.3 billion in June 2016, 75.2 per cent higher than the

Ksh 36.7 billion in May 2016.

FISCAL DEVELOPMENTS

2.0 FISCAL DEVELOPMENTS

2.1 Revenue

32. By the end of June 2016, total cumulative revenue including A-I-A collected

amounted to Ksh 1,219.1 billion against a target of Ksh 1,299.9 (Table 5 and Chart 9).

This performance was below the target by KShs. 80.9 billion. Ordinary revenue collection

was KShs. 1,152.9 billion against a target of KShs. 1,184.4 billion, which was KShs 31.5

billion below the target. The Railway Development Levy collection amounted to KShs.

17.27 billion against a target of KShs. 17.95 billion. Cumulative ministerial A-I-A

recorded an under performance of KShs. 49.4 billion for the period under review. The A-

I-A under performance reflects the problem of under reporting by the ministry’s

expenditure return for the period under review. However, compared to the last FY. The

Revenue collection increased by 12.8 per centage.

Table 5: Government Revenue and External Grants, Period Ending 30th June, 2016

(KShs. Million)

Actual Target

Total Revenue (a+b) 1,081,194 1,219,054 1,299,912 (80,857) (6.22)

(a) Ordinary Revenue 1,029,280 1,152,875 1,184,368 (31,492) (2.66)

Import Duty 74,048 79,188 83,628 (4,440) (5.31)

Excise Duty 115,872 139,540 137,175 2,365 1.72

PAYE 279,796 280,830 309,189 (28,358) (9.17)

Other Income Tax 228,785 279,834 268,797 11,038 4.11

VAT Local 127,905 160,389 165,758 (5,369) (3.24)

VAT Imports 131,781 128,824 134,267 (5,442) (4.05)

Investment Revenue 13,460 19,253 21,580 (2,327) (10.78)

Traffic Revenue 2,825 3,652 3,751 (99) (2.64)

Taxes on Intl. Trade & Trans.(IDF Fee) 26,994 25,245 26,141 (896) (3.43)

Others 1 27,815 36,119 34,082 2,037 5.98

(b) Appropriation In Aid 2 51,914 66,179 115,544 (49,365) (42.72)

o/w Railway Development Levy 18,424 17,273 17,951 (677) (3.77)

( c) External Grants 28,117 29,597 65,973 (36,377) (55.14)

Total Revenue and External Grants 1,109,311 1,248,651 1,365,885 (117,234) (8.58)

Total Revenue and External Grants

as a percentange of GDP19.09 19.02 20.80

-

2014/2015

Actual

2015/16 Deviation

KShs.

Deviation

in

percentage

1/ includes rent of buildings, fines and forfeitures, other taxes, reimbursements and other fund contributions, and

miscellaneous revenue.

2/ includes receipts from Road Maintenance Levy Fund and A-I-A from Universities

Source: National Treasury

33. As a proportion of GDP, the total cumulative revenue and grants in the period

under review amounted to 19.0 per cent compared to 19.1 per cent in the corresponding

period of the FY 2014/15. External grants amounted to KShs. 29.6 billion against a target

of KShs. 66.0 billion, representing an under performance of KShs. 36.4 billion.

FISCAL DEVELOPMENTS

13

Chart 9: Total Ordinary Revenue

0

100,000

200,000

300,000

400,000

500,000

600,000

June 15 June 16

Am

ou

nt

(ksh

s m

illi

on

)

Period

Import Duty Excise duty VAT Income Tax Other


2.2 Expenditure

34. The total expenditure and net lending for the period under review amounted to

KShs. 1,768.5 billion, against a target of KShs. 2,043.9 billion. The shortfall of KShs.

275.5 billion was attributed to lower absorption recorded in both recurrent and

development expenditures by the National Government. (Table 6 and Chart 10).

Recurrent expenditure for National Government amounted to KShs. 982.6 billion(excl.

KShs.31.4 billion for Parliament and Judiciary), against a target of KShs.1,046.0 billion,

with underperformance recorded in wages and salaries, and Operation and Maintenance

which accounted for KShs. 26.1 billion, and KShs. 34.4 billion, respectively.

35. Foreign interest payments amounted to KShs. 42.5 billion, compared to KShs. 32.3

billion in the same period of the 2014/15 FY. The domestic interest payments totalled

KShs. 172.9 billion, which was higher than KShs. 139.7 billion paid in the corresponding

period of the previous financial year.

FISCAL DEVELOPMENTS

14

Table 6: Expenditure and Net Lending, Period Ending 30th June, 2016 (KShs.

Million)

Actual Targets

1. RECURRENT 839,028 982,611 1,046,043 (63,432) 17.1

Domestic Interest 139,728 172,857 174,120 (1,263) 23.7

Foreign Interest 32,261 42,471 41,387 1,084 31.6

Pensions 37,508 53,401 56,129 (2,728) 42.4

Wages and Salaries 293,115 307,421 333,527 (26,105) 4.9

Operation and Maintenance 336,417 406,460 440,880 (34,420) 20.8

O/W : Appropriation-in-Aid 28,850 34,245 79,165 (44,919) 18.7

2. DEVELOPMENT 508,101 485,364 689,383 (204,019) (4.5)

Development Projects (Net) 272,890 332,125 376,060 (43,934) 21.7

Payment of Guaranteed Loans 2,014 2,167 2,055 113 7.6

Appropriation-in-Aid 232,797 145,071 311,269 (166,198) (37.7)

3. County Governments 229,336 264,039 264,219 (180) 15.1

4. Parliamentary Service 22,880 19,777 24,813 (5,036) -

5. Judicial Service 11,689 11,662 14,451 (2,789) -

6. Equalization Fund 400 6,000 6,400 (400) -

7. CF 4,951 5,000 5,000 - -

TOTAL EXPENDITURE 1,615,985 1,768,453 2,043,909 (275,456) 9.4

2014/2015

Actual

2015/16 Deviation % Growth


Chart 10: Expenditure and Net Lending

-

100,000

200,000

300,000

400,000

500,000

600,000

June 2015 June 2016

Am

ou

nt

(ksh

s m

illi

on

)

Period

Foreign Interest Pension Domestic Interest O&M Salaries Development County Governments


FISCAL DEVELOPMENTS

15

36. The total cumulative ministerial and other public agencies expenditure was KShs.

1,205.8 billion against a target of KShs. 1,494.6 billion. Recurrent expenditure was KShs.

734.5 billion against a target of KShs. 813.7 billion, while development expenditure was

KShs. 471.3 billion against a target of KShs. 680.9 billion. The per centage of total

expenditures to the target was 80.7 per cent (90.3 per cent recurrent and 69.2 per cent

development) as at the end of the period under review. As indicated earlier, the

discrepancy between actual and target expenditures partly reflect the non-capture of the

district expenditures and hence under reporting by ministries. These ministerial

expenditures are therefore, provisional.

37. As at the end of the period ending 30th June, 2016, expenditures by the Ministry of

Education, Science and Technology; Teachers Service Commission and Ministry of

Health (Social Sector) accounted for 41.2 per cent of total recurrent expenditure. While

the State Department for Interior, and Ministry of Defence accounted for 12.0 per cent

and 12.6 per cent respectively.

38. Analysis of development outlay indicates that the Department of Infrastructure

(16.1 per cent) accounted for the largest share of the total development expenditures,

followed by the Ministry of Energy and Petroleum (14.4 per cent), the Department for

Transport (14.3) and the State Department Planning (11.1 per cent, mainly on CDF). The

development expenditures in large ministries were below the target because of non-

inclusion of expenditures from the districts and some donor funded projects. Table 7

gives details of various Ministerial/Departmental and Commissions expenditures for the

period under review.

FISCAL DEVELOPMENTS

16

Table 7: Ministerial Expenditures, Period Ending 30th June, 2016 (KShs. Million)

MINISTRY/DEPARTMENT/COMMISSIONS

Actual* Target Actual* Target Actual* Target

1011 The Presidency 7,689 7,859 (170) 509 1,040 (531) 8,198 8,899 (702) 92.1

1021 State Department for Interior 88,175 94,226 (6,051) 11,875 15,506 (3,631) 100,050 109,732 (9,682) 91.2

1022 State Department for Coordination of National

Government

16,104 17,583 (1,480) 539 611 (72) 16,643 18,194 (1,551) 91.5

1031 State Department for Planning 17,490 19,441 (1,951) 52,182 54,444 (2,262) 69,672 73,886 (4,213) 94.3

1032 State Department for Devolution 2,511 2,771 (261) 7,277 9,194 (1,917) 9,787 11,966 (2,178) 81.8

1041 Ministry of Defence 92,180 92,270 (90) - 77 (77) 92,180 92,347 (167) 99.8

1051 Ministry of Foreign Affairs and International

Trade

9,009 15,324 (6,314) 346 1,204 (858) 9,355 16,527 (7,172) 56.6

1061 State Department for Education 53,447 58,721 (5,274) 3,487 8,406 (4,918) 56,935 67,127 (10,192) 84.8

1062 State Department for Science and Technology 42,961 60,377 (17,416) 10,601 13,107 (2,505) 53,562 73,484 (19,921) 72.9

1071 The National Treasury 39,778 40,667 (890) 51,858 59,298 (7,440) 91,636 99,966 (8,330) 91.7

1081 Ministry of Health 25,199 29,195 (3,995) 17,254 31,479 (14,225) 42,454 60,674 (18,220) 70.0

1091 State Department of Infrastructure 34,060 41,627 (7,567) 75,838 84,857 (9,019) 109,897 126,484 (16,587) 86.9

1092 State Department of Transport 1,381 5,799 (4,418) 67,353 164,524 (97,171) 68,734 170,323 (101,589) 40.4

1101 Ministry of Environment, Natural Resources

and Regional Dev't Authorities

6,453 13,085 (6,631) 3,634 8,230 (4,596) 10,088 21,315 (11,227) 47.3

1102 Ministry of Water and Irrigation 1,976 4,208 (2,232) 18,596 36,810 (18,214) 20,572 41,019 (20,447) 50.2

1111 Ministry of Land Housing and Urban

Development

3,784 3,781 3 21,131 26,264 (5,134) 24,914 30,045 (5,131) 82.9

1121 Ministry of Information Communications and

Technology

2,762 2,999 (237) 13,524 14,694 (1,170) 16,286 17,693 (1,407) 92.0

1131 Ministry of Sports Culture and Arts 4,408 4,449 (41) 2,271 2,260 10 6,679 6,710 (31) 99.5

1141 Ministry of Labour Social Security and Services 7,983 9,071 (1,088) 12,655 15,278 (2,623) 20,638 24,349 (3,711) 84.8

1151 Ministry of Energy and Petroleum 1,964 2,090 (126) 68,103 94,709 (26,605) 70,067 96,799 (26,731) 72.4

1161 State Department for Agriculture. 5,929 6,295 (366) 13,678 15,808 (2,130) 19,607 22,103 (2,496) 88.7

1162 State Department for Livestock. 1,742 2,065 (323) 2,451 4,016 (1,565) 4,193 6,081 (1,888) 69.0

1163 State Department for Fisheries. 1,276 1,331 (55) 2,309 2,393 (84) 3,584 3,723 (139) 96.3

1171 Ministry of Industrialization and Enterprise

Development

2,858 2,973 (114) 4,948 5,242 (294) 7,807 8,215 (409) 95.0

1181 State Department for Commerce and Tourism 2,717 2,784 (67) 4,093 4,381 (288) 6,810 7,164 (355) 95.0

1182 State Department for East African Affairs 1,565 1,621 (57) 20 65 (45) 1,585 1,686 (102) 94.0

1191 Ministry of Mining 617 737 (120) 490 614 (125) 1,107 1,351 (244) 81.9

1251 Office of The Attorney General and Department

of Justice

2,987 3,845 (858) 124 453 (329) 3,111 4,298 (1,187) 72.4

1261 The Judiciary 11,258 11,684 (426) 1,689 3,202 (1,513) 12,947 14,886 (1,939) 87.0

1271 Ethics and Anti-Corruption Commission 2,513 2,957 (444) - - - 2,513 2,957 (444) 85.0

1281 National Intelligence Service 21,486 21,507 (21) - - - 21,486 21,507 (21) 99.9

1291 Office of the Director of Public Prosecutions 1,906 2,384 (478) 37 73 (36) 1,943 2,457 (515) 79.1

1301 Commission for the Implementation of the

Constitution

296 312 (16) - - - 296 312 (16) 95.0

1311 Office of the Registrar of Political Parties 523 533 (10) - - - 523 533 (10) 98.1

1321 Witness Protection Agency 342 370 (27) - - - 342 370 (27) 92.6

2011 Kenya National Commission on Human Rights 440 459 (19) - - - 440 459 (19) 95.9

2021 National Land Commission 1,238 1,240 (2) 289 289 (0) 1,527 1,529 (2) 99.9

2031 Independent Electoral and Boundaries

Commission

4,514 4,889 (374) 27 27 - 4,541 4,916 (374) 92.4

2041 Parliamentary Service Commission 7,643 9,352 (1,710) 1,971 2,100 (129) 9,613 11,452 (1,839) 83.9

2042 National Assembly 14,121 15,461 (1,339) - - - 14,121 15,461 (1,339) 91.3

2051 Judicial Service Commission 403 473 (70) - - - 403 473 (70) 85.2

2061 The Commission on Revenue Allocation 313 328 (15) - - - 313 328 (15) 95.4

2071 Public Service Commission 1,077 1,081 (4) 52 52 (0) 1,129 1,133 (4) 99.7

2081 Salaries and Remuneration Commission 758 970 (213) - - - 758 970 (213) 78.1

2091 Teachers Service Commission 180,974 186,519 (5,544) 100 67 33 181,074 186,586 (5,511) 97.0

2101 National Police Service Commission 471 476 (4) - - - 471 476 (4) 99.1

2111 Auditor General 3,627 3,765 (138) 31 135 (104) 3,658 3,900 (242) 93.8

2121 Controller of Budget 487 529 (42) - - - 487 529 (42) 92.0

2131 The Commission on Administrative Justice 410 481 (70) - - - 410 481 (70) 85.4

2141 National Gender and Equality Commission 303 310 (7) - 18 (18) 303 328 (25) 92.4

2151 Independent Police Oversight Authority 255 396 (141) - - - 255 396 (141) 64.4

Total 734,368 813,670 (79,303) 471,341 680,928 (209,587) 1,205,709 1,494,599 (288,890) 80.7

% total

expenditure

to total

target

Reccurent Development Total

Jun-16 Variance Jun-16 Variance Jun-16 Variance

*Provisional


2.2.1 Guaranteed Loans to Parastatals

39. Cumulative principal and interest payments of guaranteed loans to parastatals with

liquidity problems amounted to KShs 1,050.2 million (principal and interest payments of

Ksh 954.13 million and Ksh 96.09 million, respectively) against a payment target of

KShs 940.3 million (Table 8) for period ending 30th June, 2016.

FISCAL DEVELOPMENTS

17

Table 8: Schedule and actual payments on Guaranteed Debt for the period ending

30th June, 2016 (Kshs. Mn) Quarter IV Cumm. June 2016*

Projected Actual Projected Actual Projected Actual Projected Actual Projected Actual

NCC - - - - - - - - - -

TARDA 161.07 148.22 - - 159.32 148.53 0.00 - 319.82 296.75

KBC - - 312.00 355.75 - - 308.46 397.72 620.46 753.47

TOTAL (QTR) 161.07 148.22 312.00 355.75 159.32 148.53 308.46 397.72 940.28 1,050.22

Quarter IBorrower

Quarter II Quarter III

* Provisional


2.3 Fiscal Outturn

40. Between July 1, 2015 and June 30, 2016, cumulative overall fiscal balance (on a

commitment basis and excluding grants), amounted to KShs. 549.4 billion (equivalent to

8.4 per cent of GDP) against a targeted deficit of KShs. 744.0 billion (equivalent to 11.3

per cent of GDP) (Chart 11 and Table 9). Over the same period in 2014, the fiscal deficit

stood at KShs. 534.8 billion (equivalent to 9.2 per cent of GDP). Including grants, the

fiscal balance (on a commitment basis) deficit stood at 7.9 per cent of GDP against a

targeted deficit of 10.3 per cent of GDP. The Fiscal Outturns for the past years is provided

as Annex I.

Chart 11: Fiscal Balance as at June 2016

(1,000)

(500)

-

500

1,000

1,500

2,000

Jun-15 Jun-16

Am

ou

nt

(ksh

s b

illi

on

)

Period

Revenue Expenditure Deficit


FISCAL DEVELOPMENTS

18

Table 9: Budget Outturn, Cumulative Ending 30th June, 2016 (KShs. Million)

Actual* Targets Actual Targets

A. TOTAL REVENUE AND GRANTS 1,248,651 1,365,885 (117,234) 12.56 19.02 20.80

1. Revenue 1,219,054 1,299,912 (80,857) 12.75 18.56 19.80

Ordinary Revenue 1,152,875 1,184,368 (31,492) 12.01 17.56 18.04

Import Duty 79,188 83,628 (4,440) 6.94 1.21 1.27

Excise Duty 139,540 137,175 2,365 20.43 2.13 2.09

Income tax 560,665 577,985 (17,321) 10.24 8.54 8.80

VAT 289,213 300,025 (10,812) 11.37 4.40 4.57

Investment Revenue 19,253 21,580 (2,327) - 0.29 0.33

Others 65,016 63,975 1,042 12.81 0.99 0.97

Appropriation-in-Aid 66,179 115,544 (49,365) 27.48 1.01 1.76

2. Grants 29,597 65,973 (36,377) 5.26 0.45 1.00

AMISOM Receipts 4,293 6,440 (2,147) - 0.00 0.10

Revenue 7,866 17,025 (9,159) 13.73 0.12 0.26

Appropriation-in-Aid 16,275 41,165 (24,890) 1.10 0.25 0.63

Italian Debt Swap 499 500 0 - 0.00 -

County Health Facilities - DANIDA 664 844 0 - 0.00 -

B. EXPENDITURE and NET LENDING 1,768,453 2,043,909 (275,456) 9.43 26.93 31.13

1. Recurrent 1,014,050 1,085,307 (71,257) 16.08 15.44 16.53

Domestic Interest 172,857 174,120 (1,263) 23.71 2.63 2.65

Foreign Interest 42,471 41,387 1,084 31.65 0.65 0.63

Pension 53,401 56,129 (2,728) 42.37 0.81 0.85

Wages and Salaries 307,421 333,527 (26,105) 4.88 4.68 5.08

O & M/Others 437,899 480,144 (42,245) 18.04 6.67 7.31

2. Development and Net Lending 479,364 682,983 (203,619) (5.66) 7.30 10.40

3. Equalization Fund 6,000 6,400 (400) - 0.00 0.10

4. County Governments 264,039 264,219 (180) 15.13 4.02 4.02

5. CF 5,000 5,000 - - 0.08 0.08 C. DEFICIT EXCL.GRANT (Commitment basis) (549,398) (743,997) 194,599 2.73 (8.37) (11.33)

D. DEFICIT INCL.GRANTS (Commitment basis) (519,802) (678,024) 158,222 2.59 (7.92) (10.33)

E. ADJUSTMENT TO CASH BASIS 45,232 - 45,232 30.02 0.69 -

F. DEFICIT INCL.GRANTS (Cash basis) (474,570) (678,024) 203,454 0.57 (7.23) (10.33)

G. FINANCING 474,570 678,024 (203,454) 0.57 7.23 10.33

1. Foreign financing 269,924 419,010 (149,086) 23.94 4.11 6.38

Disbursements 304,986 457,389 (152,404) 2.73 4.64 6.97

Programme Loans 8,574 8,213 361 - 0.00 0.13

Project Cash Loans 43,654 61,119 (17,465) 44.03 0.66 0.93

Project Loans AIA 55,369 115,499 (60,130) (14.01) 0.84 1.76

Project Loans SGR _ AIA 52,357 118,226 (65,869) - 0.00 1.80

Commercial Finanacing 145,031 154,332 (9,301) - 0.00 2.35

O/W syndicated loan 145,031 0 145,031 - 0.00 -

Export Credt- Commercial Finanacing 0 0 - - 0.00 -

Debt repayment - Principal (35,062) (38,379) 3,317 (55.67) (0.53) (0.58)

2. Other Domestic Financing 2,389 2,579 (189) - 0.04 0.04

3. Kenya Airways 0 0 - - 0.00 -

3. Euro Bond Balance 0 0 - - 0.00 -

4. NET DOMESTIC FINANCING 202,257 256,435 (54,179) (19.45) 3.08 3.91

MEMO ITEM

GDP ESTIMATE 6,566,445.30 6,566,445.30

2015/2016 Deviation % growth 2015/2016 as a % of GDP

*Provisional


2.3.1. Government Financial Statistics (GFS) 2014

41. In line with the international best practice the Government is committed to

improving the quality and coverage of its statistics, as such this QEBR has included a

statement of Government operation in the GFSM 2014 format for budgetary Central

Government (National Government) from 2012/13 to 2014/15. See annex ii.

FISCAL DEVELOPMENTS

19

2.4 Financing

2.4.1 External Financing

42. Cumulative external financing for the period between July 1st 2015 and June 30th

2016 amounted to a net borrowing of KShs. 269.9 billion (Table 10). Total disbursements

(inflows) including Appropriations-in-Aid amounted to KShs. 305.0 billion for the period

ending 30th June, 2016 against a target of KShs. 457.4 billion. This amount included

KShs. 43.7 billion Project cash loans, KShs. 55.4 billion project loans A.I.A., KShs. 52.4

billion project loans A.I.A. for SGR, KShs. 145.0 billion Commercial Financing and

KShs. 8.6 billion Programme loans. External repayments (outflows) of principal debt

amounted to KShs. 35.1 billion. The amount comprises of principal repayments due to

both bilateral, multilateral organizations and Commercial amounting to Kshs 18.8 billion,

Kshs 15.4 billion and Kshs 802.9 million, respectively.

Table 10: External Financing, Period Ending 30th June, 2016 (KShs. Million) Quarter I

2015/16

Quarter II

2015/16

Quarter III

2015/16

Quarter IV

2015/16

Actual Actual Actual Actual Target

DISBURSEMENTS: 13,417.80 214,094.08 26,835.39 195,669.43 304,985.50 457,389.03

Project Cash loans 5,322.48 2,767.53 7,924.36 27,640.09 43,654.47 61,119.15

Project loans A-I-A 8,095.32 11,561.29 11,356.50 24,355.84 55,368.94 115,498.86

Project Loans SGR _ AIA 51,100.85 1,020.36 235.58 52,356.79 118,226.00

Commercial Financing 74,332.20 - 70,699.00 145,031.20 154,332.00

O/W syndicated loan 74,332.20 - 70,699.00 145,031.20 -

Export Credit - - - -

Programme Loans - 6,534.18 2,039.92 8,574.10 8,213.02

EXTERNAL REPAYMENTS: 8,574.95 7,828.32 9,296.97 9,361.36 35,061.60 34,688.67

Bilateral(incl. Italy Debt SWAP) 3,541.63 5,218.32 4,221.00 5,853.16 18,834.11 19,148.45

Multilateral (excl. IMF) 5,033.32 2,205.95 5,075.97 3,109.40 15,424.64 14,784.65

Commercial - 404.05 - 398.80 802.85 755.57

NET FOREIGN FINANCING 4,842.85 206,265.76 17,538.42 186,308.07 269,923.90 422,700.36

Cumulative June 2016


2.4.2 Domestic Financing

43. By the end of June 2016, net domestic borrowing amounted to KShs. 202.8 billion

against a target borrowing of Ksh 256.4 billion (Table 9). The borrowing comprised of

KShs. 187.2 billion from Commercial Banks, KShs. 139.4 billion from Non-Banking

Financial Institutions and KShs. 4.6 billion from Non Residents, and a repayment of

KShs. 128.4 billion by the Central Bank, (Table 11). Comparatively, for the same period

in 2014, the net domestic borrowing, comprised of net repayments of, KShs. 3.5 billion to

Non-Residents and a borrowing of KShs. 119.0 billion from the Central Bank, KShs.

108.0 billion from commercial banks and KShs. 27.5 billion from non-banking financial

institutions (chart 12).

FISCAL DEVELOPMENTS

20

Chart 12: Domestic Financing

(150,000)

(100,000)

(50,000)

-

50,000

100,000

150,000

200,000

250,000

300,000

June 2015 June 2016

Am

ou

nt

(ksh

s m

illi

on

)

Period

CBK Commercial Bank Non Banks Total

Source: Central Bank of Kenya

44. The stock of Treasury Bills held by Central Bank , Non- Banks and Commercial

Banks recorded net increase of KShs. 20.5 billion, , KShs. 92.2 billion and KShs. 131.2

billion respectively, while the stock of Treasury Bills held by Non-residents decreased by

KShs. 119.0 million,. The stock of Fixed Rate Bonds held by Central Bank, Commercial

Banks, Non-Residents and non-Banks recorded a net increase of KShs. 9.4 billion, KShs.

37.3 billion, KShs.2.3 billion and KShs. 37.7 billion respectively.

FISCAL DEVELOPMENTS

21

Table 11: Domestic Financing, Period Ending 30th June, 2016 (KShs. Millions) SEPTEMBER DECEMBER MARCH JUNE

2015 2015 2016 2016

1.CENTRAL BANK 50,212 (39,720) (52,186) (128,376)

Overdraft 9,430 8,738 9,961 7,709

Treasury bills rediscounts 25,506 20,549 20,549 20,549

Fixed rate Bonds 9,400 9,381 9,381 9,381

Items on Transit (35) (56) (17) (2)

Frozen Account - (562) (562) (1,117)

Less Govt Deposits 5,911 (77,771) (91,498) (164,896)

2.COM. BANKS (35,908) 27,925 88,402 187,152

Advances (938) 2,852 3,016 2,830

Treasury bills (41,904) 23,774 70,428 131,164

Fixed rate Bonds 9,024 8,910 23,341 37,281

Special Bonds -

Zero Coupon bonds -

Infrastructure Bonds (9,371) (4,683) (8,335) 9,978

Savings and Development Bond -

Less Govt Deposits 7,281 (2,928) (48) 5,899

3. NON BANKS (29,467) 37,673 73,248 139,440

Treasury bills (33,401) 16,266 45,132 92,163

Fixed rate Bonds 10,930 22,228 32,742 37,705

Zero Coupon bonds -

Infrastructure Bonds (6,996) (821) (4,627) 9,573


4. NON RESIDENTS 743 1,820 1,106 4,576

Treasury bills 634 1,215 (404) (119)

Fixed rate Bonds 109 493 1,541 2,339

Infrastructure Bond - 112 (30) 2,356


Zero Coupon bonds -

5. NET CREDIT (14,419) 27,699 110,571 202,793 Note: Treasury bills as reflected here are given at cost value as opposed to Table 13 given at Face value.


3.0 PUBLIC DEBT

3.1 Overall Debt Position

45. The gross public debt increased by KShs. 774.7 billion from KShs. 2,843.7 billion

as at end of June 2015 to KShs. 3,618.4 billion (equivalent to 55.1 per cent of GDP) by

30th June 2016, comprising of 49.8 per cent of external debt and 50.2 per cent of domestic

debt The overall increase is attributed to increased external debt due to exchange rate

fluctuations, disbursements from external loans and more uptake of domestic debt during

the period. Net public debt increased by KShs. 608.6 billion from KShs. 2,601.4 billion as

at end of June 2015 to KShs. 3,210.0 billion (equivalent to 48.9 per cent of GDP) by

period under review (Table 12).

FISCAL DEVELOPMENTS

22

Table 12: Kenya’s Public and Publicly Guaranteed Debt, June 2013 to June

2016 (KShs. millions) Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15* Mar-16 Jun-16

EXTERNAL

BILATERAL 255,282 257,637 228,180 245,138 243,498 289,914 278,547 389,083 384,607 445,057 482,203 481,282 522,395 539,181

MULTILATERAL 490,619 511,791 540,215 558,725 577,914 597,340 608,022 612,353 618,456 684,631 754,599 751,154 766,649 812,270

COMMERCIAL BANKS 57,905 58,928 59,603 59,144 59,205 234,799 185,163 255,188 259,746 276,937 295,642 366,231 360,175 442,598

SUPPLIERS CREDIT 14,957 15,207 15,606 15,763 15,750 16,451 16,096 15,959 15,298 16,628 17,788 16,516 16,359 9,206

SUB – TOTAL 818,763 843,563 843,603 878,770 896,366 1,138,504 1,087,828 1,272,583 1,278,108 1,423,253 1,550,233 1,615,183 1,665,578 1,803,255

DOMESTIC:

CENTRAL BANK 55,320 36,383 66,321 64,620 77,161 65,700 63,580 58,286 64,835 63,335 107,637 101,386 102,648 99,856

COMMERCIAL BANKS 475,427 527,080 554,587 563,009 585,825 617,221 601,426 649,940 715,011 730,419 682,694 764,399 829,688 927,307

TOTAL BANKS 530,747 563,462 620,909 627,629 662,986 682,921 665,006 708,227 779,846 793,755 790,331 865,785 932,336 1,027,163

NON BANKS & NON RESIDENTS 451,164 487,094 547,207 561,554 568,197 601,406 595,868 599,723 617,280 626,689 597,635 674,232 714,192 787,970

SUB-TOTAL 981,911 1,050,556 1,168,115 1,189,183 1,231,183 1,284,327 1,260,875 1,307,950 1,397,126 1,420,444 1,387,966 1,540,017 1,646,527 1,815,133

GRAND TOTAL GROSS 1,800,674 1,894,119 2,011,719 2,067,953 2,127,549 2,422,831 2,348,702 2,580,533 2,675,234 2,843,698 2,938,199 3,155,200 3,312,105 3,618,389

LESS ON-LENDING (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701)

LESS GOVERNMENT DEPOSITS (119,044) (155,734) (231,857) (238,898) (132,056) (199,815) (239,554) (298,879) (275,083) (236,565) (208,869) (305,496) (320,041) (402,688)

GRAND TOTAL NET 1,675,929 1,732,684 1,774,161 1,823,354 1,989,792 2,217,315 2,103,447 2,275,953 2,394,449 2,601,432 2,723,628 2,844,004 2,986,363 3,209,999

*Provisional Source: National Treasury

3.2 Domestic Debt

46. The stock of gross domestic debt increased by KShs. 394.7 billion from KShs.

1,420.4 billion in June 2015 to KShs. 1,815.1 billion in June 2016. The stock of Treasury

Bills held by Central Bank, Commercial Banks, Non-Banking Financial Institution and

Non Residents increased by KShs. 269.2 billion from KShs. 318.9 billion in June 2015 to

KShs. 588.1 billion in June 2016, (Table 13). The total stock of Treasury Bonds, Floating,

Fixed Rate, Special and Zero coupon Bonds, increased by KShs. 92.0 billion from KShs.

760.1 billion in June 2015 to KShs. 852.1 billion in June 2016 (Chart 13).

Chart 13: Domestic Debt Stock by Instruments

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

June 2015 June 2016

Am

ou

nt (k

sh

s m

illi

on

)

Period

Others Frozen Govt A/cs Treasury Bills Fixed R.T.Bonds

Source: Data from CBK

FISCAL DEVELOPMENTS

23

Table 13: Stock of Domestic Debt, Fourth Quarter 2015/2016 (KShs. million) Jun-13 Sep-13 Dec-13 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

1.CENTRAL BANK 36,383 66,321 64,620 65,700 63,578 58,286 64,835 63,335 107,637 101,386 102,648 99,856

Overdraft 6,999 34,187 34,187 37,238 34,374 30,929 37,398 36,494 45,924 45,233 46,455 44,204

Frozen Govt Accounts 28,889 28,889 28,889 28,334 27,779 27,231 27,231 26,676 26,676 26,114 26,114 25,559

Treasury bills / bonds rediscounts 8 3,036 1,462 13 1,358 64 95 39 25,545 20,588 20,588 20,588

Items on Transit 154 79 48 70 21 25 62 82 47 26 65 80

Fixed rate bonds 333 131 35 46 46 36 48 45 9,445 9,426 9,426 9,426

2.COM.BANKS 527,080 554,587 563,009 617,221 601,426 649,940 715,011 730,419 682,694 764,399 829,688 927,307

Advances 2,578 2,427 2,439 4,449 2,739 3,291 2,594 2,488 1,717 5,446 5,559 5,093

Stocks - - - - - -

Treasury Bills 183,454 199,290 191,083 176,437 161,528 191,132 236,776 217,703 172,346 244,167 296,347 361,859

Floating Rate T. Bonds - - - - - - - - -

Fixed Rate T. Bonds 262,689 263,319 273,150 339,999 340,323 337,638 348,473 364,511 373,861 373,753 390,314 403,844

Special Bonds 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Zero Coupon Bonds - - - - - - - - -

Savings and Development Bond 7,148 7,148 7,148 7,148 7,648 7,648 7,648 7,648 7,648 7,648 7,648 7,648

Infrastructure Bonds 61,210 72,403 79,188 79,188 79,188 100,231 109,519 128,069 117,122 123,385 119,820 138,863

3. NON BANKS 477,525 537,480 551,277 586,481 584,058 585,917 604,389 616,025 586,102 661,652 702,233 774,943

Stocks - - - - -

Treasury Bills 78,155 99,088 107,918 111,513 104,780 89,838 96,446 94,478 61,237 117,923 149,588 199,033

Floating Rate T. Bonds - - - - -


Tax Reserve Certificate 69 69 69 69 69 69 69 69 69 69 69 69

Zero Coupon Bonds - - - - -

Infrastructure Bonds 69,201 79,357 89,585 89,583 89,583 104,020 112,709 118,892 110,718 118,906 115,171 132,431

Savings and Development Bond 15,072 15,072 15,072 15,072 20,580 20,580 20,580 20,580 20,580 20,580 20,580 20,580

4. NON RESIDENTS 9,569 9,727 10,277 14,925 11,812 13,806 12,891 10,664 11,533 12,580 11,958 13,027

Treasury Bills 6,076 6,212 6,798 11,443 8,374 10,370 8,959 6,709 7,469 8,132 6,370 6,608

Floating Rate T. Bonds - - - - - - - - -


Zero Coupon Bonds - - - - - - - - -

Savings and Development Bond 9 9 9 9 9 9 9 9 9 9 9 9

Infrustructure Bonds 441 441 443 445 445 445 445 445 445 445 445 445

5. TOTAL DEBT 1,050,556 1,168,115 1,189,183 1,284,327 1,260,875 1,307,950 1,397,126 1,420,444 1,387,966 1,540,017 1,646,527 1,815,133

6. LESS ON-LENDING 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5,701

7. Less Govt Deposits 155,734 231,857 238,898 199,815 239,554 298,879 275,083 236,565 208,869 305,496 320,041 402,688

8. NET DEBT 889,121 930,558 944,584 1,078,811 1,015,619 1,003,370 1,116,341 1,178,178 1,173,395 1,228,821 1,320,785 1,406,744

NOTE: Treasury Bills reflected here are at face value as opposed to Table 11, given at cost


3.3 External Public Debt

47. In dollar terms, external public debt stock increased by US $ 3,407.1 million from

US$ 14,428.8 million in June 2015 to US$ 17,836.0 million by end of June 2016 (Table

14 and Chart 14). The debt stock comprised 29.9 per cent, 45.0 per cent, 24.5 per cent

and 0.5 per cent of debt owed to bilateral, multilateral institutions, Commercial Banks and

suppliers’ credit, respectively. During the fourth quarter, external public debt increased by

US$ 1,399.5 million to US$ 17,836.0 million in June 2016 from US$ 16,436.52 million as

at end of March 2016 This increase is attributed to disbursements made during the period.

Exchange rate end June 2016 Ksh/US$= 101.10.

FISCAL DEVELOPMENTS

24

Table 14: Kenya’s External Public and Publicly Guaranteed Debt June 2011- June

2016 (US $ Million) CREDITOR Jun-11 Jun-12 Jun-13 Sept. 2013 Dec. 2013 Mar-14 Jun-14 Sep-14 Dec. 2014 Mar. 2015 Jun-15 Sep-15 Dec. 2015 Mar. 2016 Jun-16*

BILATERAL

AUSTRIA 22.45 15.64 11.90 12.29 10.12 10.08 8.18 7.00 6.10 5.43 7.53 7.56 10.02 10.38 7.69

BELGIUM100.57

87.44 88.40 89.10 87.89 92.58 92.40 81.06 72.16 64.79 62.26 73.03 68.01 66.18 72.16

CANADA 14.2 17.70 16.10 16.17 15.39 15.39 15.39 14.57 13.70 13.70 12.88 12.88 8.20 8.20 8.01

DENMARK 35.4 24.65 23.10 23.86 23.46 23.38 22.73 20.79 19.09 16.88 14.57 14.64 15.68 16.25 15.24

FINLAND 1.47 1.24 1.10 1.14 1.07 1.07 1.07 0.95 0.84 0.80 0.72 1.72 29.40 0.47 2.45

FRANCE 448.98 435.80 551.10 626.96 683.57 689.44 702.75 665.84 664.36 589.69 598.47 613.81 589.97 606.29 587.79

GERMANY 296.78 295.36 291.10 301.74 305.06 303.81 303.58 278.75 263.23 224.78 228.70 229.65 220.12 222.12 225.18

ITALY 48.83 34.75 24.80 19.64 19.87 19.79 19.59 12.66 12.11 10.83 11.17 6.39 13.43 8.81 6.15

JAPAN 1,244.58 1,275.10 1,009.10 1,020.08 956.77 958.02 964.48 875.26 794.31 803.01 801.06 814.31 795.64 835.50 1,025.20

NETHERLANDS 33.52 34.73 30.20 34.13 32.48 31.45 30.83 26.36 24.10 20.22 19.87 20.16 18.88 17.48 23.24

UK 25.91 22.99 20.10 21.30 20.35 20.52 21.01 18.58 16.29 15.47 14.87 14.33 12.44 12.02 9.81

USA 65.66 60.90 56.00 55.55 53.39 52.22 51.83 49.73 48.51 46.89 45.23 42.79 41.67 40.01 40.08

CHINA 361.1 466.81 733.92 753.27 940.63 918.54 922.76 922.30 2,221.16 2,214.53 2,555.16 2,536.23 2,734.72 3,141.41 3,097.14

OTHERS 160.08 150.29 138.38 140.78 150.28 145.07 152.08 146.09 138.65 138.33 139.46 147.16 145.92 170.06 212.89

TOTAL BILATERAL 2,859.53 2,923.42 2,995.30 3,116.02 3,300.33 3,281.36 3,308.69 3,119.93 4,294.61 4,165.34 4,511.95 4,534.64 4,704.10 5,155.18 5,333.03

MULTILATERAL

ADB/ADF 585.83 811.08 938.60 1,084.69 1,115.65 1,188.59 1,165.37 1,249.11 1,253.70 1,438.45 1,523.02 1,617.33 1,645.79 1,732.41 1,967.01

BADEA - - - - - -

EEC/EIB 139.06 129.80 183.30 186.41 187.73 183.82 235.74 235.53 232.65 204.40 209.09 220.46 209.71 212.38 208.43

IBRD 0 - - - - - -

IDA/IFAD 3,552.80

3,532.90 3,867.40 3,927.23 4,098.20 4,291.81 4,316.49 4,341.29 4,342.33 4,176.27 4,243.70 4,409.66 4,564.97 4,684.74 4,928.48

IMF** 529.49 909.60 857.80 867.34 966.04 961.84 950.42 883.96 833.30 786.53 873.38 871.74 860.55 845.21 839.22

OTHERS 98.93 112.76 103.40 106.31 105.87 104.55 148.35 100.44 97.05 92.32 91.55 92.49 60.82 90.83 91.01

TOTAL MULTILATERAL 4,906.11 5,496.15 5,950.50 6,171.97 6,473.49 6,730.62 6,816.38 6,810.33 6,759.02 6,697.96 6,940.74 7,211.68 7,341.84 7,565.57 8,034.16

COMMERCIAL BANKS 1/ - 600.00 685.10 687.89 685.26 684.91 2,679.53 2,073.97 2,816.72 2,813.09 2,807.57 2,807.81 3,579.57 3,554.34 4,377.73

EXPORT CREDIT278.65 175.84 176.80 180.11 182.64 182.20 187.75 180.29 176.15 165.68 168.58 168.94 161.43 161.43 91.06

GRAND TOTAL 8,044.29 9,195.41 9,807.70 10,155.99 10,641.72 10,879.09 12,992.35 12,184.52 14,046.50 13,842.07 14,428.84 14,723.07 15,786.94 16,436.52 17,835.97

In percentage of total

BILATERAL 35.55 31.79 30.54 30.68 31.01 30.16 25.47 25.61 30.57 30.09 31.27 30.80 29.80 31.36 29.90

MULTILATERAL 60.99 59.77 60.67 60.77 60.83 61.87 52.46 55.89 48.12 48.39 48.10 48.98 46.51 46.03 45.04

COMMERCIAL BANKS 1/ - 6.52 6.99 6.77 6.44 6.30 20.62 17.02 20.05 20.32 19.46 19.07 22.67 21.62 24.54

EXPORT CREDIT 3.46 1.91 1.80 1.77 1.72 1.67 1.45 1.48 1.25 1.20 1.17 1.15 1.02 0.98 0.51

TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

*Provisional

** include IMF item


Chart 14: External Public Debt

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

June 2015 June 2016

Am

ou

nt (

US

$ m

illi

on)

Period

Commercial Banks Suppliers Credit Bilateral Multilateral


FISCAL DEVELOPMENTS

25

3.3.1 External Debt Service

48. At the end of June 2016, the total cumulative debt service payments to external

creditors amounted to KShs 77.3 billion. This comprised of KShs 35.1 billion (45.3 per

cent) principal and KShs 42.3 billion (54.7 per cent) interest (Table 15 and chart 15).

Chart 15: External Debt Service by Creditors June, 2016

Bilateral

Multilateral

Commercial Creditors


FISCAL DEVELOPMENTS

26

Table 15: External Debt Service, July – June 2016 (KShs. Million)

CATEGORY PRINCIPAL* INTEREST* TOTAL*

BILATERAL

AUSTRIA 133.21 11.29 144.50

FINLAND 40.26 11.62 51.89

FRANCE 3,778.71 1,137.50 4,916.21

ITALY 506.02 573.63 1,079.65

JAPAN 6,353.41 803.51 7,156.93

SAUDI FUND 565.25 72.49 637.74

SPAIN 465.86 180.27 646.12

USA 592.06 161.90 753.96

CANADA 185.06 15.35 200.42

BELGIUM 1,748.74 128.34 1,877.08

GERMANY 906.71 302.75 1,209.46

CHINA 1,998.29 10,912.81 12,911.10

KUWAIT 296.46 24.83 321.29

NETHERLANDS 604.88 68.45 673.34

SWEDEN 54.23 1.02 55.25

SWITZERLAND 61.43 1.15 62.58

DENMARK 159.82 - 159.82

KOREA 58.31 32.40 90.72

UK 326.35 17.53 343.88

INDIA - 183.72 183.72

OTHERS/NEW LOANS 29.96 29.96

MULTILATERAL

ADB/ADF 1,191.57 1,631.70 2,823.27

BADEA 118.61 31.40 150.00

EIB/EEC 1,243.63 584.52 1,828.15

IDA 12,067.99 3,251.89 15,319.89

OPEC 460.92 101.37 562.30

NDF 60.99 22.54 83.53

IFAD 280.15 117.01 397.16

**IMF - - -

TOTAL MULTILATERAL 15,423.86 5,740.43 21,164.29

COMMERCIAL 802.87 21,876.84 22,679.71

TOTAL BILATERAL 18,835.09 14,670.52 33,505.61

* Provisional

** IMF debt serviced by CBK Source: National Treasury

ANNEX I

27

FISCAL RESULTS, 2005/06 – 2015/2016 (KShs. Millions) 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 ,2013/14 2014/15 2015/16*

311,251 373,030 432,220 487,893 563,655 659,603 748,128 866,505 974,418 1,106,378 1,219,054

283,427 340,010 396,489 455,780 517,769 621,852 681,766 775,698 918,990 1,031,248 1,152,875

108,897 124,855 156,832 184,447 219,975 272,439 312,463 373,086 449,590 508,581 560,665

76,263 96,270 111,939 126,854 141,971 171,881 176,386 184,916 232,630 259,685 289,213

20,511 27,510 32,944 36,181 41,271 46,072 51,712 57,650 67,555 74,048 79,188

50,309 56,406 61,858 69,872 74,112 80,567 78,884 85,660 102,029 115,872 139,540

27,447 34,970 32,916 38,426 40,440 50,893 62,320 74,386 67,185 73,062 84,269

27,824 33,020 35,731 32,113 45,886 37,752 66,362 90,807 55,428 75,130 66,179

382,818 419,570 534,842 595,719 709,336 819,767 945,313 1,132,126 1,300,589 1,639,199 1,768,453

306,515 306,847 403,368 435,542 520,853 584,126 650,414 816,365 752,502 860,569 1,014,050

112,277 127,258 145,996 155,220 172,609 197,959 218,833 274,407 281,197 297,978 307,421

41,247 42,537 47,877 52,058 55,945 78,876 81,913 121,235 134,821 171,876 215,329

31,445 36,860 42,181 45,949 49,603 71,887 71,873 110,184 119,193 139,615 172,857

9,802 5,677 5,696 6,109 6,341 6,989 10,039 11,051 15,628 32,261 42,471

19,759 20,449 24,089 27,191 28,606 26,670 26,082 27,611 30,155 37,508 53,401

1,300 1,392 800 121 50 5 6 10 -

131,932 115,211 184,606 200,952 263,644 280,616 323,580 393,102 306,330 353,206 437,899

23,891 28,701 32,343 40,611 52,788 45,691 61,578 68,551 28,205 50,566 45,108

67,692 80,354 131,473 160,177 188,482 234,566 294,899 305,978 319,274 509,713 453,925

48,037 62,123 86,213 111,962 153,495 183,658 190,116 186,231 225,850 278,676 300,686

18,607 16,750 42,932 45,842 32,661 48,379 102,144 117,346 91,239 228,511 145,071

4,000 - 2,328 2,373 2,327 2,529 2,639 2,400 2,185 2,125 2,167

1,048 1,481 - - - 1,075 - - - 4,951 5,000

9,783 193,390 229,336 264,039

5. Parliamentary Service 22,473 22,743 19,777

6. Judicial Service 12,951 11,887 11,662

7. Equalization Fund 400 6,000

(71,567) (46,540) (102,622) (107,826) (145,680) (160,164) (197,185) (265,621) (326,172) (532,821) (549,398)

20,070 15,494 25,449 18,065 16,326 19,253 15,645 20,990 26,957 28,117 29,598

(51,497) (30,697) (77,173) (89,761) (129,355) (140,910) (181,540) (244,631) (299,214) (504,703) (519,801)

15,030 (5,571) 84,738 (27,259) (14,337) 20,765 3,752 (12,553) (8,505) 33,129 45,231

(36,467) (36,269) 7,566 (117,020) (143,692) (120,145) (177,788) (257,184) (307,720) (471,574) (474,570)

36,467 36,269 (7,566) 117,020 143,692 120,145 177,788 257,184 307,720 471,574 474,570

1,216 (2,392) 6,326 41,143 12,627 28,602 112,575 85,306 104,726 217,479 269,924

Other Domestic Financing 571 1,160 1,813 2,102 1,267 2,992 2,389

35,251 38,661 (13,891) 75,876 130,494 90,383 63,400 169,776 201,727 251,102 202,257

7,000 4,000 69,427 - - - - - 140,509 -

Others 110,593

- - - -

20.49 21.63 22.02 21.80 22.93 19.13 18.73 19.24 19.21 19.04 18.56

18.66 19.72 20.20 20.37 21.06 18.04 17.07 17.23 18.12 17.75 17.56

7.17 7.24 7.99 8.24 8.95 7.90 7.82 8.28 8.86 8.75 8.54

5.02 5.58 5.70 5.67 5.78 4.99 4.42 4.11 4.59 4.47 4.40

1.35 1.60 1.68 1.62 1.68 1.34 1.29 1.28 1.33 1.27 1.21

3.31 3.27 3.15 3.12 3.02 2.34 1.98 1.90 2.01 1.99 2.13

1.81 2.03 1.68 1.72 1.65 1.48 1.56 1.65 1.32 1.26 1.28

1.83 1.92 1.82 1.43 1.87 1.10 1.66 2.02 1.09 1.29 1.01

25.20 24.33 27.25 26.62 28.86 23.78 23.67 25.14 25.64 28.21 26.93

20.18 17.80 20.55 19.46 21.19 16.94 16.29 18.13 14.84 14.81 15.44

7.39 7.38 7.44 6.94 7.02 5.74 5.48 6.09 5.54 5.13 4.68

2.72 2.47 2.44 2.33 2.28 2.29 2.05 2.69 2.66 2.96 3.28

2.07 2.14 2.15 2.05 2.02 2.09 1.80 2.45 2.35 2.40 2.63

0.65 0.33 0.29 0.27 0.26 0.20 0.25 0.25 0.31 0.56 0.65

1.30 1.19 1.23 1.21 1.16 0.77 0.65 0.61 0.59 0.65 0.81

0.09 0.08 0.04 0.01 0.00 0.00 0.00 0.00 - - -

8.68 6.68 9.40 8.98 10.73 8.14 8.10 8.73 6.04 6.08 6.67

1.57 1.66 1.65 1.81 2.15 1.33 1.54 1.52 0.56 0.87 0.69

4.46 4.66 6.70 7.16 7.67 6.80 7.38 6.79 6.30 8.77 6.91

3.16 3.60 4.39 5.00 6.24 5.33 4.76 4.14 4.45 4.80 4.58

1.22 0.97 2.19 2.05 1.33 1.40 2.56 2.61 1.80 3.93 2.21

0.26 - 0.12 0.11 0.09 0.07 0.07 0.05 0.04 0.04 0.03

0.07 0.09 - - - 0.03 - - - 0.09 0.08

- - - - - - - 0.22 3.81 3.95 4.02

5. Parliamentary Service - - - - - - - - 0.44 0.39 0.30

6. Judicial Service - - - - - - - - 0.26 0.20 0.18

7. Equalization Fund - - - - - - - - - 0.01 0.09

(4.71) (2.70) (5.23) (4.82) (5.93) (4.65) (4.94) (5.90) (6.43) (9.17) (8.37)

1.32 0.90 1.30 0.81 0.66 0.56 0.39 0.47 0.53 0.48 0.45

(3.39) (1.78) (3.93) (4.01) (5.26) (4.09) (4.55) (5.43) (5.90) (8.69) (7.92)

0.99 (0.32) 4.32 (1.22) (0.58) 0.60 0.09 (0.28) (0.17) 0.57 0.69

(2.40) (2.10) 0.39 (5.23) (5.85) (3.48) (4.45) (5.71) (6.07) (8.11) (7.23)

2.40 2.10 (0.39) 5.23 5.85 3.48 4.45 5.71 6.07 8.11 7.23

0.08 (0.14) 0.32 1.84 0.51 0.83 2.82 1.89 2.06 3.74 4.11

Other Domestic Financing - - - - 0.02 0.03 0.05 0.05 0.02 0.05 0.04

2.32 2.24 (0.71) 3.39 5.31 2.62 1.59 3.77 3.98 4.32 3.08

0.46 0.23 - 3.10 - - - - - 2.42 -

Others - - - - - - - - - 1.90 -

- - - - - - - - - - -

1,519,079.00 1,724,197.00 1,962,879.00 2,238,000.00 2,458,000.00 3,447,609.95 3,993,534.55 4,503,295.53 5,071,729.50 5,811,194.50 6,566,446.30

A.TOTAL REVENUE

1.Revenue

Income Tax

VAT

Import Duty

Excise Duty

Other Revenue

2.Appropriation –in –Aid

B.EXPENDITURE & NET LENDING

1.Recurrent

Wages and Salaries

Interest Payments

Domestic Interest

Foreign Interest Due

Pensions, etc

Civil Service Reform

Operations & maintenance/ Others

Of which Appropriation-in-Aid

2.Development & Net Lending

Development Projects

Appropriation-in-Aid

Payment of guaranteed loans

3. Drought Development Expenditures/CCF

D.DEFICIT EXCL. GRANTS (Commitment Basis)

E.GRANTS

F.DEFICIT INCL.GRANTS (Commitment basis)

G. ADJUSTMENT TO CASH BASIS

H.DEFICIT INCL.GRANTS (cash basis)

I.FINANCING

Foreign Financing

NET DOMESTIC FINANCING

Of which Sovereign Bond Deposits

In Percentage of GDP

A.TOTAL REVENUE

1.Revenue

Income Tax

VAT

Import Duty

Excise Duty

Other Revenue

2.Appropriation –in –Aid

B.EXPENDITURE & NET LENDING

1.Recurrent

Wages and Salaries

Interest Payments

Domestic Interest

Foreign Interest Due

Pensions

Civil Service Reform

O &M/ Others

of which Appropriation-in-Aid

2.Development & Net Lending

H.DEFICIT INCL.GRANTS (cash basis)

I.FINANCING

Foreign Financing

NET DOMESTIC FINANCING

Development Projects

Appropriation-in-Aid

Payment of guaranteed loans

3. Drought Expenditures

D.DEFICIT EXCL. GRANTS (Commitment Basis)

E.GRANTS

4. Transfer to County Governments

4. Transitional Transfer to County Governments

Nominal GDP at Market price (Kshs. million)

Of which Sovereign Bond Deposits

Memorandum Item:

F.DEFICIT INCL.GRANTS (Commitment basis)

G.ADJUSTMENT TO CASH BASIS

Note: * indicate Preliminary results


ANNEX II

28

BUDGET CENTRAL GOVERNMENT*

STATEMENT OF SOURCES AND USES OF CASHFY 2016/17 FY 2016/17

Preliminary

Actual

Approved

Estimates

Budget

Estimates

Preliminary

Actual

Approved

Estimates

Budget

Estimates

CASH FLOWS FROM OPERATING ACTIVITIES:

1 Cash receipts from operating activities 1,256,361.4 1,365,884.9 1,573,228 19.1 20.8 21.3

Taxes 1,158,454.8 1,199,243.8 1,392,146 17.6 18.3 18.8

Taxes on income, profits, and capital gains 560,664.7 577,985.3 671,099 8.5 8.8 9.1

Taxes on property 3,898.8 5,335.7 6,159 0.1 0.1 0.1

Taxes on goods & services 461,761.1 476,633.2 554,775 7.0 7.3 7.5

Taxes on international trade & transactions 121,706.6 127,720.0 147,041 1.9 1.9 2.0

Other taxes 10,423.5 11,569.6 13,071 0.2 0.2 0.2

Social contributions 0.0 129.6 147 0.0 0.0 0.0

Grants 37,307.2 65,973.3 72,719 0.6 1.0 1.0

Other receipts 60,599.4 100,538.2 108,215 0.9 1.5 1.5

2 Cash payments for operating activities 1,559,185.9 1,664,928.5 1,880,989 23.7 25.4 25.4

Compensation of employees 314,856.0 334,795.9 353,312 4.8 5.1 4.8

Purchases of goods and services 133,262.4 170,653.0 192,671 2.0 2.6 2.6

Interest 215,328.5 215,507.4 250,787 3.3 3.3 3.4

Subsidies 30,299.6 30,300.0 31,553 0.5 0.5 0.4

Grants 784,422.9 854,070.0 989,083 11.9 13.0 13.4

Social benefits 52,049.5 53,022.2 58,583 0.8 0.8 0.8

Other payments 28,966.9 6,580.0 5,000 0.4 0.1 0.1

3 Net cash inflow from operating activities (3=1-2) -302,824.5 -299,043.6 -307,761.4 -4.6 -4.6 -4.2

CASH FLOWS FROM INVESTMENTS IN

NONFINANCIAL ASSETS (NFAs):

4 Purchases of nonfinancial assets 183,595.5 322,445.8 368,504.8 2.8 4.9 5.0

Fixed assets 182,473.1 321,323.4 366,925.0 2.8 4.9 5.0

Strategic stocks 1,122.5 1,122.5 1,579.9 0.0 0.0 0.0

5 Sales of nonfinancial assets 0.0 0.0 0 0.0 0.0 0.0

6 Net cash outflow: investments in NFAs (6=4-5) 183,595.5 322,445.8 368,504.8 2.8 4.9 5.0

Cash surplus / deficit (3-6) -486,420.0 -621,489.5 -676,266.3 -7.4 -9.5 -9.1

CASH FLOWS FROM FINANCING ACTIVITIES:

7 Net acquisition of financial assets other than cash 30,172.3 32,510.4 14,617 0.5 0.5 0.2

Domestic 26,422.0 28,760.0 11,017 0.4 0.4 0.1

Foreign 3,750.3 3,750.4 3,600 0.1 0.1 0.0

8 Net incurrence of liabilities 626,996.6 661,990.4 696,244 9.5 10.1 9.4

Domestic 358,123.1 243,925.3 234,995 5.5 3.7 3.2

Foreign 268,873.5 418,065.2 461,250 4.1 6.4 6.2

Net cash inflow from financing activities (8-7) 596,824.3 629,480.0 681,626.9 9.1 9.6 9.2

Net change in the stock of cash 130,275.6 0.0 0.0 2.0 0.0 0.0

Discrepancy -19,871.4 7,990.6 5,360.7 -0.3 0.1 0.1

Nominal GDP 6,566,446 6,566,446 7,392,247 100.0 100.0 100.0

FY 2015/16

Ksh millions

FY 2015/16

Ksh millions

Source: National Treasury *National Government

Date post:	22-Jul-2020
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