Budget deficit put at K1.9bil

The National National

TREASURY Secretary Dairi Vele says the 2018 national budget expenditure is K14.7 billion against a revenue projection of K12.7 billion.
This means a K1.9 billion fiscal deficit or 2.48 per cent of GDP.
“This is expected to maintain the total debt-to-GDP ratio at just above 32 per cent of GDP, which is well within the approved range of 30 to 35 per cent of GDP prescribed in the Fiscal Responsibility Act (amended 2017),” Vele said.
“The budget is consistent with the stringent and prudent fiscal anchors that we’ve developed.”
The fiscal anchors include:

  • Total revenue (excluding grants) to GDP ratio to be lifted to 14.6 per cent in 2018 from under 13 per cent in 2017, and then after taking account of the significant one-off measures in the 2018 Budget, target 14 per cent by 2022;
  • government outlay needs to be reduced from 18 per cent of GDP in 2018 to 16 per cent in 2022;
  • these revenue and expenditure targets will allow the debt-to-GDP ratio to be reduced to 30 per cent by 2022, ensuring a sustainable debt profile, which will include the shift towards external financing through Budget support loans from the World Bank and ADB and through an inaugural US Dollar bond issuance programme; and,
  • Personnel Emolument costs are to be contained and brought down from 49 per cent of total non-resource, non-grant revenue in 2017 to 31 per cent by 2022.