14 C
London
Tuesday, March 21, 2023
HomeWorld NewsTrim the fat from the State expenditure bill

Trim the fat from the State expenditure bill

Date:

Related stories

Scanning machine, documents seized from private hospital in Sagar

The Shivamogga District Inspection and Monitoring Committee (DIMC),...

Credit Suisse Shareholder Says Override of Vote ‘Unprecedented’

(Bloomberg) -- One of Credit Suisse Group AG’s...

CBI seeks restoration of RCN against Choksi

The Central Bureau of Investigation (CBI) said on...

Google suspends Chinese shopping app amid security concerns

Google has suspended the Chinese shopping app Pinduoduo...
spot_imgspot_img


Editorials

Trim the fat from the State expenditure bill


Treasury

The National Treasury building in Nairobi. FILE PHOTO | NMG

Interest rates on government bonds and Treasury bills have been going up in recent weeks, a reflection of the adjustment of the market to high inflation and a depreciating shilling.

These numbers are, however, not solely relevant to the investors lending to the government.

There is a real impact on the economy arising out of these rising rates, particularly the interest that borrowers will be charged for bank loans.

One can expect banks to adjust their rates upwards, taking a cue from the government which as a risk-free borrower effectively sets the floor at which loans ought to be charged in the economy.

At the same time, the taxpayer can expect that the drain on the exchequer via debt servicing costs will go up, further constricting the funds available for key projects such as roads, healthcare facilities and irrigation plans.

This is why the Treasury must revisit the fiscal or budget consolidation plan, with the aim of trimming the fat from the expenditure bill.

By cutting wastage, the government borrowing pressure will be brought under control, forcing banks to lend to the private sector at lower rates and in higher volumes.



Source link

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here