The Treasury has for some time now pursued an expansionary fiscal policy where the government pours millions of shillings on big infrastructure projects. This, however, cannot happen because the same government needs money to fund the very expansionary fiscal policy that it has long initiated after overstepping its outer limits. The Treasury has fallen on the very bad side of an expansionary fiscal policy — over indebtedness. Of the Sh3.6 trillion, Sh2.04 trillion will be funded by government revenues, of which taxes account for Sh1.776 trillion. The time of reckoning has come and the Treasury must address first, the conflicting fiscal policy and second, the rising fiscal deficit.

Source: The Star June 09, 2021 19:52 UTC