The extent of the effects of the economic downturn on the country's budget became clear on Monday when the Treasury said it would have to borrow the money to meet its requirements this financial year.
At the same time, US$539 million (Sh41.5 billion) will be required to finance imports, according to a presentation by Treasury permanent secretary Joseph Kinyua during a donors' conference.
Foreign exchange
According to the PS's presentation, an additional $539 million is required to close the external financing gap created by increased importation of food and the need to build foreign exchange reserves to the targeted level.
The Treasury has also had to re-prioritise government projects to get Sh9 billion for the famine relief programme, according to Finance minister Uhuru Kenyatta.
Sources who attended the meeting between government representatives led by Prime Minister Raila Odinga and the donors at the Kenyatta International Conference Centre told the Nation that most of the envoys present had expressed concerns about reports of corruption in the government.
They also raised concerns about how aid given for famine relief programmes would be accounted for given the reports of irregularities in the handling of subsidised flour to ease the food crisis.
Danish envoy Bo Jensen said doubts about the exact amounts of food available, the number of those affected by the famine and issues with the distribution process need to be addressed.
The government has put the official figure of those affected by the famine at 10 million but Mr Jensen said the true picture could only be known once the United Nations issued a report.
New constitution
It is understood that the Government, which was represented by Mr Odinga, Mr Kenyatta and ministers William Ruto (Agriculture) and Charity Ngilu (Water and Irrigation) acknowledged that graft remained an issue and some policies regarding the distribution of food had failed.
At a press conference on the sidelines of the meeting, ambassadors from Germany, the United Kingdom and the United States said they would continue with their support for famine relief efforts without imposing any conditions. – Daily Nation
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