As part of measures to achieve a revised budget deficit target of 5.7 percent of GDP, Kenya plans to “remove all new projects” from the budget for the current fiscal year through June.
According to Treasury Secretary Njuguna Ndung’u, Kenya will also scale down on some externally funded projects. On recurrent expenditure, Treasury has directed ministries to eliminate all spending on foreign travel, purchasing furniture, motor vehicles, and refurbishing buildings. Ndung’u added that the spending cuts will be packaged into a supplementary budget and presented to lawmakers.
Meanwhile, the bullish bias in Kenyan eurobonds remained entrenched on Monday as positive developments on the fiscal front continued to bolster investor sentiment towards the country. For context, Kenya’s 5-year eurobond yield shed 33bp to close the session at 9.86%, a level last seen in May. The longer-dated 10-year eurobond yield meanwhile fell by 29bp to close Monday’s session at 10.60%.