National Treasury and Economic Planning Cabinet Secretary Njuguna Ndung’u has announced that President William Ruto has successfully stabilized the economy.
Speaking to the media on Wednesday, Ndung’u highlighted the significant progress made, noting the country’s recovery from a challenging economic period.
“We have seen inflation decrease to 5 percent, reaching its target level,” he stated.
He further mentioned that the exchange rate has stabilized, which is a positive indicator for the overall economy.
“This is clear evidence that the economic recovery began in the last quarter of 2023,” he added.
However, the CS raised concerns about the public’s narrow focus on tax and revenue-raising measures in budget discussions, which often overshadow more complex issues.
“The most important thing is to realize that every time the budget is mentioned, everybody talks about taxes and revenue-raising measures, but that is just one component,” he said.
He described the budget planning challenge as a “trilemma,” referring to a single problem with three interconnected components that complicate government financial management.
The first aspect of this trilemma, according to Ndung’u, is the widespread expectation for increased government spending across critical sectors such as healthcare, infrastructure, education, and electricity. Meeting these demands requires substantial revenue, which can only come from taxes or debt.
“The second problem is the limitations on debt. Today debt can be income, tomorrow it’s an expenditure,” he emphasized.
“The third problem is that if we cannot finance those expenditures through debt, then you have to finance them through taxes,” he added.
CS Ndung’u is scheduled to present the 2024/25 Financial Year budget at 3 pm on Thursday at the Parliament buildings. The presentation will reveal the government’s plans for various sectors of the economy.
