National Treasury Principal Secretary (PS) Chris Kiptoo has this morning been put to task by Members of a parliamentary Committee over the worrying state of the Kenyan economy.
Appearing before the National Assembly Public Investments Committee on Commercial Affairs and Energy, Kiptoo, who had earlier been at State House for the signing of the Supplementary Budget, was asked to account for the recent borrowing spree by the Government amid the economic hardships.
Kiptoo told the Committee that the dwindling fortunes of the Kenyan Shilling were largely occasioned by external factors, which the country had little control over.
However, he added that the Government had rolled out stabilization measures.
“We have a situation where Commercial Bank reserves of the dollar are higher than what we have in the public coffers. However, we are rolling out measures to create more confidence in the forex market,” said Kiptoo.
The PS, however, sparked controversy in the Committee when he indicated that the weakening shilling was not entirely bad, as a section of Kenyans were benefiting from it, citing those in the export trade.
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Dollar is the Problem
He said, this was the ripe time for Kenya to invest more in foreign exchange earners such as tourism, as the country was currently a cheaper tourism destination.
The Committee Chairman David Pkosing of Pokot South said it was unfortunate that there was little communication coming from the government on measures to stabilize the Kenyan shilling, whose dwindling fortunes had put the cost of fuel and basic commodities on fast escalation.
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“We need to know if we are headed to a crush. And I dare say this dollar thing is the biggest challenge to the survival of the Kenyan economy,” said Pkosing.
Furthermore, Kaloleni MP Paul Katana said it was unfortunate that the Government was borrowing without Parliamentary approval despite the worrying state of the economy.
During the debate of a Report by the Public Debt and Privatization Committee on the first Supplementary Budget of the 2023/2024 Financial Year, MPs had raised outrage that Kenya would incur an estimated Ksh 200 billion over initially borrowed loans due to the weakening Kenyan shilling.
The Kenyan shilling is currently trading at an average of 152 against the dollar.
The PS was appearing before the Committee for a roundtable to discuss the material uncertainty related to going concern at the East African Portland Cement Company, which has been consistently operating on losses.