Cabinet Secretary for National Treasury, Mr. Henry Rotich (right) during
the signing of the Sh 550 million grant agreement for Lake Victoria
water and sanitation project Kisumu and a Sh4.6 billion credit agreement
for the Kenya informal settlements improvement project with France
Ambassador to Kenya Rémi Maréchaux at the Treasury on December 17, 2015.
Mr Rotich has said that measures are in place to keep interests rates
subdued in the first quarter of this year. PHOTO | DIANA NGILA | NATION
MEDIA GROUP
Treasury Cabinet Secretary Henry Rotich has said that measures
are in place to keep interests rates subdued in the first quarter of
this year.
Analysts have, however, warned that the
rates that rose in October due to pressure by the government to meet
recurrent expenditure, might tick again when short-term debt matures.
Cytonn
Investment says the government had picked up a lot of short-term debt
this financial year which started to mature in December and January
2016.
“There are expectations that yields could spike
in the first quarter due to the high amount of maturities in this fiscal
year, and that is why the government is keen to lock up long-term
funds,” Cytonn said in a weekly note to investors.
The government has borrowed Sh173.9 billion domestically for the current fiscal year against a target of about Sh104.9 billion.
Most
of these are short-term instruments and mature within the current
fiscal year, and the government will be under pressure in refinancing
the obligations.
STRUCTURAL ADJUSTMENTS
“We
are prepared to ensure that it (maturing debt) is not a problem, we
have taken steps to make sure it does not pose a challenge,” Mr Rotich
said at his office last month.
Central Bank of Kenya
data showed that the government paid out Sh24.8 billion almost half of
the liquidity in the market while Sh13 billion worth of Treasury Bills
were redeemed.
Mr Rotich said structural adjustments, a
review of the budget and tightening screws at the Kenya Revenue
Authority (KRA), will get 2016 off on the right path.
He said the government had instituted measures to increase revenue by the taxman.
“We
have put in specific measures to improve our revenue receipts and have
discussed with KRA to put in measures to seal leakages to ensure targets
are back to normal,” Mr Rotich said on Wednesday.
Mr
Rotich said the government had put in the legal framework by enacting
the Excise Duty Act 20-15 and the Tax procedures Act to improve revenue
collection this month.
The government also introduced
new import rules requiring traders to obtain certificates of conformity
(COCs) for all cargo, saying the regulations had not been passed by
Parliament as required by law.
The COC is a document
that an importer obtains after goods are inspected and certified to be
of required standards. The Kenya Bureau of Standards (Kebs) has
appointed agents to carry out the exercise at the source of goods.
The standards agency, in collaboration with the KRA started implementing the rule December 1.
FREIGHT SERVICES
Mr Rotich said a container freight services system to implement the Mombasa Single Customs Terminal would be in place this year.
KRA
will install a new customs software early 2016 to replace the faulty
Simba system with assistance from Trademark East Africa (TMEA) in the
first quarter of 2016.
KRA has been working with TMEA to replace the current system with a Sh1 billion ($10 million) upgrade.
“This
gives us an all revenue collection point at the port through and
establish a unified warehousing regime to avoid diversion and dumping of
goods,” the CS said.
Mr Rotich said the government
will also be able to collect billions of shillings once an Income Tax
tribunal comes into place in 2016.
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