Keep a measured tone about public finances

Cabinet Secretary, National Treasury & Economic Planning Njuguna Ndung’u at Kenyatta International Convention Centre. FILE PHOTO | DENNIS ONSONGO | NMG

Government officials should be careful to ensure that their public pronouncements do not cause unnecessary panic.

Over the past few weeks, the official messaging has been that Kenya is broke and struggling to service its debt.

The prioritisation of debt repayment reportedly made it difficult for the government to pay the salaries of civil servants on time or meet other obligations.

Another notable claim was that the government was due to pay creditors Sh150 billion in March – about double the amount that’s usually paid.

But a look at the Treasury data shows the government’s financial position was better in March than in February despite the larger debt payments.

Official statistics published in the latest Kenya Gazette notice show Kenya’s debt repayment bill grew to Sh121.3 billion in March from Sh66.7 billion in February, reflecting an extra Sh54.6 billion.

But revenues for March grew from Sh84.2 billion to Sh260.9 billion, which was more than adequate to cover the additional debt repayment expenses.

Public servants have a duty to stick to the truth when communicating from their influential platforms.

The consequences of mishandling information on public finances at a time when the economy is facing many headwinds, including the weakening of the shilling, can be dire.

Investors have been unwilling to provide new long-term debt to the government as evidenced by the underperformance of recent bond auctions. This suggests that they are either scared of default or want higher interest rates or both.