Quarterly Economic and Budgetary Review

Transcription

1 Republic of Kenya THE NATIONAL TREASURY Quarterly Economic and Budgetary Review First Quarter, Financial Year 2017/2018 Period ending 30 th September, 2017 November 2017 Edition

2 TABLE OF CONTENTS 1.0 RECENT ECONOMIC DEVELOPMENTS ECONOMIC GROWTH INFLATION BALANCE OF PAYMENTS FOREIGN EXCHANGE RESERVES EXCHANGE RATES MONEY AND CREDIT INTEREST RATES CAPITAL MARKETS FISCAL DEVELOPMENTS REVENUE EXPENDITURE Guaranteed Loans to Parastatals Payments FISCAL OUTTURN FINANCING External Financing Domestic Financing PUBLIC DEBT OVERALL DEBT POSITION DOMESTIC DEBT EXTERNAL PUBLIC DEBT External Debt Service 23 FISCAL RESULTS, 2010/ /2017 (KSH MILLIONS)... 25

3 DISCLAIMER This review is compiled by The National Treasury. Information contained here may be reproduced without restriction provided due acknowledgement is made of the source. Comments, suggestions as well as requests for clarification on information contained in this report are welcome and should be addressed to the Principal Secretary, The National Treasury, P.O. Box , GPO, Nairobi. or to: ii

4 LIST OF ABBREVIATIONS AND ACRONYMS A-I-A CBK FY GDP ICT IMF KNBS Ksh Mn NDA NFA NG-CDF NSE QEBR RDL US$ Appropriation in Aid Central Bank of Kenya Fiscal Year Gross Domestic Product Information, Communication and Technology International Monetary Fund Kenya National Bureau of Statistics Kenya Shillings Million Net Domestic Assets Net Foreign Assets National Government Constituencies Development Fund Nairobi Securities Exchange Quarterly Economic and Budgetary review Railway Development Levy United States Dollar iii

5 LEGAL BASIS/FOUNDATION/PROVISION FOR THE QEBR The Quarterly Economic and Budgetary Review Report is Published in accordance with Section 83 of the Public Finance Management Act, It states as follows: 83. (1) An accounting officer for a national government entity shall prepare a report for each quarter of the financial year in respect of the entity. (2) In preparing a quarterly report for a national government entity, the accounting officer shall ensure that the report (a) Contains information on the financial and non-financial performance of the entity; and (b) Is in a form that complies with the standards prescribed and published by the Accounting Standards Board from time to time. (3) Not later than fifteen days after the end of each quarter, the accounting officer shall submit the quarterly report to the Cabinet Secretary responsible for the entity and the National Treasury. (4) The Cabinet Secretary responsible for an entity shall forward a copy of the report to the Cabinet Secretary and Controller of Budget. (5) Not later than forty five days after the end of each quarter, the National Treasury shall (a) consolidate the quarterly reports and submit them to the National Assembly and a copy of the reports to the Controller of Budget, Auditor-General and the Commission on Revenue Allocation; and (b) Publish and publicize the reports. (6) In the case of an entity that is a state corporation, the accounting officer for the corporation shall submit the quarterly report to the Cabinet Secretary responsible for the corporation who shall, upon approving it, forward a copy to the Cabinet Secretary. iv

6 HIGHLIGHTS OF THE QUARTERLY ECONOMIC AND BUDGETARY REVIEW: FIRST QUARTER, 2017/ Economic growth The Kenyan economy recorded robust growth of 5.0 percent in the Second Quarter of 2017 up from a growth of 4.7 percent in the first quarter of The strong performance was largely supported by modest recovery in agriculture sector following improved weather conditions. In addition, stable macroeconomic conditions, the ongoing government investment in infrastructure development, low international oil prices and robust growth in tourist arrivals supported improved economic activity during the quarter. 2. Inflation Overall month on month inflation declined to 7.1 percent in September 2017 (within Government target range of 5+/-2.5 percent) from 8.0 percent in August The decline was due to the fall in the cost of some food items which was mainly attributed to a relief from a situation of depressed supply of goods and services as experienced in August Balance of Payments The overall balance of payments position improved to a surplus of US$ million (0.2 percent of GDP) in the year to August 2017 from a deficit of US$ 1,239.0 million (-1.9 percent of GDP) in the year to August The current account balance was at a deficit of US$ 5,197.8 million (7.1 percent of GDP) in the year to August 2017 from a deficit of US$ 3,325.7 million (5.2 percent of GDP) in the year to August Foreign Exchange Reserves The banking system s foreign exchange holdings increased to US$ 10,368 million in August 2017 from US$ 10,355 million in August The official foreign exchange reserves held by the Central Bank remained strong at US$ 7,910 million (5.3 months of import cover) in August 2017 compared with US$ 8,144 million (5.3 months of import cover) in August Money and Credit Broad money supply, M3, grew by 7.8 percent in the year to September 2017 compared to a growth of 8.0 percent in the year to September The slowdown in growth was largely on account of a decline in the growth of net foreign assets despite an improvement in the flow of net domestic credit mainly to the Government and other public sectors. 6. Capital Markets Activities at the stock market slowed down in September 2017 due to the prolonged electioneering period. The Nairobi Securities Exchange (NSE) 20 Share Index slowed to 3,751 points in September 2017 from 4,027 points in August However, this was a recovery compared to 2,995 points in February Total Revenue Collection The National Government cumulative revenue collection including A-I-A for the period July 2017 to September 2017 amounted to Ksh billion (equivalent to v

7 3.9 per cent of GDP) against a target of Ksh billion or 4.4 per cent of GDP. This represented an underperformance of Ksh 42.5 billion mainly due to shortfalls in Income Tax, Excise Duty and A-I-A collection. 8. Government Expenditure and Net Lending The total cumulative expenditure and net lending inclusive of transfers to County governments for the period ending 30 th September, 2017 amounted to Ksh billion. This was Ksh 43.4 billion below the target of Ksh billion and was largely attributed to low absorption levels in operations and maintenance, and wages and salaries for the National Government. Expenditure by County Government was below target. 9. Guaranteed Loans Between July 2017 and September 2017, the National Government paid a total of Ksh million on account of guaranteed loans against the projected debt service of Ksh million. 10. Overall Fiscal Balance The cumulative overall fiscal balance, on a commitment basis (excluding grants), amounted to a deficit of Ksh 66.7 billion (equivalent to 0.8 per cent of GDP), as at end-september External Financing Between July 2017 and September 2017, external financing amounted to a net borrowing of Ksh 7.5 billion. 12. Net Domestic Borrowing Net domestic financing amounted to a net borrowing of Ksh 49.2 billion (equivalent to 0.6 per cent of GDP) in the period ending 30 th September Domestic Debt Total gross domestic debt stock increased by 17.6 per cent from Ksh 1,850.1 billion as at end-september 2016 to Ksh 2,176.6 billion by the end-september External Debt The total external debt stock, including the International Sovereign Bond, stood at Ksh 2,309.8 billion for the period ending September The debt stock comprised of multilateral debt (36.5 per cent), bilateral debt (32.1 per cent), Suppliers Credit debt (0.7 per cent), and Commercial banks debt (30.7 per centincluding International Sovereign Bond). vi

8 RECENT ECONOMIC DEVELOPMENTS 1.0 RECENT ECONOMIC DEVELOPMENTS 1.1 Economic Growth 1. Kenya s economic performance remains robust registering high growth rates of 5.8 per cent in 2016 up from 5.7 per cent in 2015, despite the slow recovery in the global economy as well as that of sub Saharan African region. This growth continues to be supported by stable macroeconomic environment, increased public investment spending, strong consumer demand and continued recovery in the tourism sector. 2. This momentum continued in 2017 with growth of 5.0 per cent in Quarter 2, up from 4.7 per cent in Quarter 1. The strong growth in the second quarter of 2017 was supported by stable macroeconomic conditions and robust activities in accommodation and restaurant (13.4 per cent); real estate (9.7 per cent); information and communication (9.2 per cent); transport and storage (8.2 per cent); construction (7.5 per cent) and wholesale and retail trade (2.8 per cent). On the other hand, the growth was somewhat constrained by subdued performance in agriculture, forestry and fishing, manufacturing, electricity and financial intermediation sectors (Chart 1a). Chart 1a: Economic Growth Rates Source of data: Kenya National Bureau of Statistics 3. The Accommodation and Restaurant sector continued with the strong performance and grew by 13.4 per cent in the second quarter of 2017 largely on account of sustained improvement in security in the country and enhanced marketing efforts, this growth was however lower than the 15.8 per cent growth recorded in the second quarter of 2016 ( Chart 1b). 4. The Information and Communication sector recorded a growth of 9.2 per cent in the second quarter of 2017 up from 9.1 per cent growth in the same quarter of The sustained growth in this sector has been on account of strong performance in mobile telephony sub-sector.

9 RECENT ECONOMIC DEVELOPMENTS 5. Transport and Storage sector improved by 8.2 per cent in the second quarter of 2017 compared to 7.1 per cent in the same quarter in The sector s performance was mainly supported by increased activity in passenger and freight road transport as evidenced by increased consumption of combustion fuels. Growth in the sector was further buoyed by the introduction of passenger rail transport services using the SGR between Mombasa and Nairobi in the month of June Chart 1b: Comparison of Sectoral GDP Growth of Second Quarter 2016 and 2017 Source of data: Kenya National Bureau of Statistics 6. Increased demand in housing both for private and commercial purposes led to the improvement of the real estate sector which recorded a growth of 9.7 per cent in the second quarter of 2017 from 8.2 per cent during the same period in The ongoing activities in property development as well as civil works being implemented by the government continue to support the construction sector. However, as the Standard Gauge Railway (SGR) construction activities reduced, the vibrancy in the construction sector declined to 7.5 per cent in the second quarter of 2017 from a growth of 7.6 per cent in the second quarter of The electricity and water supply sector grew by 6.1 per cent in the second quarter of 2017 compared to a growth of 9.6 per cent in the same quarter of The slowed growth was largely attributable to a contraction in hydro generation of electricity as a result of insufficient long rains which was matched with substantial increase in thermal generation which had a negative impact on the sector s performance. 8. Financial and insurance sector recorded a growth of 4.3 per cent in the second quarter of 2017, a slowdown from a growth of 8.1 per cent registered in a similar period of The slowdown in 2017 may partly be explained by the decline in domestic credit to the private sector. 9. The manufacturing sector grew by 2.3 per cent in the second quarter of 2017 a slowdown from a growth of 5.3 per cent in a similar period in The slowdown was manifested in both the food and non-food subsectors. The reduction in agricultural production due to unfavourable weather conditions experienced in early months of the year affected agro processing activities. On the other hand, slowed construction activities led to decline in production of cement and manufacture of galvanized sheets. This together with decline in assembly of motor vehicles slowed growth in the non-food subsector. 2

10 RECENT ECONOMIC DEVELOPMENTS 10. The Agriculture, Forestry and Fishing sector slowed down to a growth of 1.4 per cent in the second quarter of 2017 from a growth of 7.1 in the same quarter in The slowed growth was largely due to the impact of the drought experienced during the fourth quarter of 2016 and suppressed long rains in 2017 which affected the production of the main food crops. Whereas most sub-sectors registered poor performance, there was a slight improvement in production of tea and horticultural products thereby reducing the effect of underperformance of the other sub-sectors on the overall growth of the sector. 1.2 Inflation 11. Overall month on month inflation declined to 7.1 per cent in September 2017 (within Government target range of 5+/-2.5 per cent) from 8.0 per cent in August 2017 (Chart 2a). The decline was due to the fall in the cost of some food items, mainly attributed to improved supply of goods and services as compared to August 2017 which experienced subdued supply. In the twelve month to September 2017, the average annual inflation rate was 8.4 per cent compared to 6.5 per cent in the same period in Chart 2a: Inflation Source of data: Kenya National Bureau of Statistics 12. In the sub Saharan Africa region, the high inflation rates in Ghana and Nigeria reflect difficult economic conditions as a result of foreign currency shortages attributed to lower commodity revenues and slow policy adjustment. The low inflation rate in South Africa reflects improved weather conditions that led to a bumper crop harvest which resulted in lower food prices (Chart 2b). 13. The EAC region (except Burundi) continues to register low inflation rates due to improved weather conditions, and prudent monetary and fiscal policy management. Burundi has been experiencing high inflation rates due to recent drought and flooding episodes. Following this, the Burundi Government instituted customs measures on imported food which is stabilizing food prices in the country. 3

11 RECENT ECONOMIC DEVELOPMENTS Chart 2b: Inflation Rates in selected African Countries (September 2017) Source of data: IMF/various CBK 1.3 Balance of Payments 14. The overall balance of payments position improved to a surplus of US$ million (0.2 per cent of GDP) in the year to August 2017 from a deficit of US$ 1,239.0 million (-1.9 per cent of GDP) in the year to August 2016 (Chart 3). The current account balance was at a deficit of US$ 5,197.8 million in the year to August 2017 from a deficit of US$ 3,325.7 million in the year to August The widening of the current account deficit reflects a 3.8 per cent drop in receipts from export of goods and a 15.1 per cent increase in imports of goods despite a 2.6 per cent increase in the net service account and an improvement in net payments primary and secondary income. As a share to GDP, the current account deficit was at 7.1 per cent in August 2017 compared to 5.2 per cent in August Chart 3: Balance of Payments (Per cent of GDP) Source of data: Central Bank of Kenya 15. The deficit in the merchandise account widened by US$ 2,263.3 million to US$ 9,858.8 million in the year to August 2017 reflecting increase in payments for oil imports on account of the rebound in international oil prices and the increase in imports of 4

12 RECENT ECONOMIC DEVELOPMENTS machinery and transport equipment mostly wagons, locomotives and associated equipment related to the Standard Gauge Railway (SGR) project. In addition, net export of goods and services declined due to lower exports of goods (mainly horticulture, oil products, manufactured goods, chemicals and related products) (Chart 4). Chart 4: Merchandise and Service Account Source of data: Central Bank of Kenya 16. In the period August 2016 to August 2017, the inflows from the services account increased by 4.7 per cent as a result of improvement in the travel services in line with the recovery in tourist arrivals despite lower receipts from transport and other services (financial services). Inflows (secondary income) improved by 13.7 per cent in the year to August 2017 mainly on account of increased income receipts by Non-Governmental Organizations and an increase in remittance inflows under personal transfers. 17. Flows in the Financial Account increased to US$ 5,905.9 million in August 2017 compared with US$ 3,130.9 million in August 2016, with the surplus reflecting higher liabilities compared to assets. The financial inflows were mainly in the form of direct investment and other investment which stood at US$ 279 million and US$ 6,475.5 million, respectively in August Other investment inflows mainly include foreign financing for Government infrastructure projects. 1.4 Foreign Exchange Reserves 18. The banking system s foreign exchange holdings increased to US$ 10,368 million in August 2017 from US$ 10, 354million in August 2016 (Table 1 and Chart 5). This was due to the increased holdings by commercial banks to US$ 2,458 million in 2017 from US$ 2,210 million in The official foreign exchange reserves held by the Central Bank remained strong at US$ 7,910 million (5.3 months of import cover) in August 2017 compared with US$ 8,144 million (5.3 months of import cover) in August

13 RECENT ECONOMIC DEVELOPMENTS Table 1: Foreign Exchange Reserves (US$ million) Source of data: Central Bank of Kenya Chart 5: Official Foreign Reserves ((US$ million) Source of data: Central Bank of Kenya 1.5 Exchange Rates 19. The Kenya Shilling exchange rate remained broadly stable against major international currencies. In September 2017, against the dollar, the Shilling depreciated by around 1.8 per cent in nominal terms to close at Ksh from Ksh in September Against the Euro and the Sterling pound, the Shilling weakened to Ksh and Ksh in September 2017 from Ksh and Ksh in September 2016, respectively (Chart 6a). Chart 6a: Kenya Shilling Exchange Rate Source of data: Central Bank of Kenya 6

14 RECENT ECONOMIC DEVELOPMENTS 20. As compared to the regional currencies, the Kenya Shilling exchange rate has continued to display relatively less volatility (Chart 6b). The stability of the Kenya shilling exchange rate reflected resilient receipts from tea and horticulture despite lower export volumes due to adverse weather conditions in the first quarter of Additionally, receipts from tourism, coffee exports and Diaspora remittances remained strong. Chart 6b: Performance of selected Currencies against the US Dollar (September 2016 to September 2017) Source: Data from Various National Central Banks 1.6 Money and Credit 21. Broad money supply, M3, grew by 7.8 per cent in the year to September 2017 compared to a growth of 8.0 per cent in the year to September 2016 (Table 2). The slowdown in growth was largely on account of a decline in the growth of net foreign assets (NFA) of the Central Bank despite an improvement in the flow of net domestic credit mainly by the Government and other public sectors. Table 2: Money and Credit Developments, Ksh billion Source of data: Central Bank of Kenya 7

15 RECENT ECONOMIC DEVELOPMENTS 22. Net Foreign Assets (NFA) of the banking system in the year to September 2017 slowed to a growth of 4.0 per cent from a growth of 51.9 per cent over a similar period in 2016 (Chart 7). The slowdown in the NFA of the Central Bank is attributed to government payments and debt servicing while a pickup in growth of the NFA by other banking institutions is on account of decreased deposit holdings by banks abroad and other accounts payable. Chart 7: Growth in Money Supply and Its Sources Source of data: Central Bank of Kenya 23. Meanwhile, the NDA of the banking system improved to a growth of 8.9 per cent in the year to September 2017 from the growth of 0.2 per cent over a similar period in The pickup in growth in 2017 is due to an improvement in the growth of net domestic credit despite the contraction in the other assets net of the banking system. 24. Domestic credit improved to an annual growth of Ksh billion (7.4 per cent) in the year to September 2017 compared to a growth of Ksh 73.3 billion (2.6 per cent) in the year to September The improvement reflects an increase in government deposits leading to an improvement in net bank credit to government despite a decline in credit uptake by the private sector. The slowdown in the other assets in the year to September 2017 is attributed to a decline in the other items at the Central Bank and other banking institutions 25. Bank credit to the private sector slowed to a growth of 1.7 per cent in the year to September 2017 from a 4.4 per cent growth in the same period in However, this is an improvement compared to the growth of 1.6 per cent in the year to August 2017 reversing the downward trend witnessed since August Real estate, manufacturing, trade, building and construction and private households on a net basis received credit flows from the banking sector in the year to September Interest Rates 26. Interest rates have remained fairly low and stable. The Monetary Policy Committee at their meeting of 18th September 2017 left the Central Bank Rate unchanged at 10 per cent. The interbank rate has remained low at 5.5 per cent in September 2017 from 8.1 per cent in August 2017 due to ample liquidity in the money market (Chart 8a), while the 91-8

16 RECENT ECONOMIC DEVELOPMENTS day Treasury Bills rate declined to 8.1 per cent in September from 8.2 per cent in August The 182 day and the 364 day Treasury Bills stabilized at 10.3 per cent and 10.9 per cent, respectively in September and August Chart 8a: Short-Term Interest Rates Source of data: Central Bank of Kenya 27. The interest rate spread narrowed to 6.3 per cent in August 2017 from 11.2 per cent in August 2016 as a result of the developments in the lending and deposit rates. Commercial Banks average lending interest declined to 13.7 per cent in August 2017 compared to 17.7 per cent in August Meanwhile, the average commercial banks deposit rate increased to 7.4 per cent from 6.4 per cent over the same period. In addition, as a result of the new Act, Kenya has the lowest lending rate among the East African countries (Chart 8b). Chart 8b: Commercial Banks Lending Rates of selected Countries (August 2017) Source of data: National Central Banks 9

17 RECENT ECONOMIC DEVELOPMENTS 1.8 Capital Markets 28. Activities at the stock market slowed down in September 2017 due to the prolonged electioneering period. The NSE 20 Share Index slowed to 3,751 points in September 2017 from 4,027 points in August 2017 while the market capitalization also slowed to Ksh 2,377 billion from Ksh 2,479 billion over the same period. However, this was a recovery compared to the performance in February 2017 with the NSE 20 share index at 2,995 points and Market capitalization at Ksh 1,825 billion. (Chart 9). Chart 9: Performance at the NSE Source of data: Central Bank of Kenya 10

18 FISCAL DEVELOPMENTS 2.0 FISCAL DEVELOPMENTS 2.1 Revenue 29. By the end of September 2017, total cumulative revenue including A-I-A collected amounted to Ksh billion against a target of Ksh (Table 3 and Chart 10). This performance was below the target by Ksh 42.5 billion. Ordinary revenue collection was Ksh billion against a target of Ksh billion, which was Ksh 29.9 billion below the target. The Railway Development Levy collection amounted to Ksh 5.2 billion against a target of Ksh 5.4 billion. Cumulative ministerial A-I-A recorded an under performance of Ksh 13.8 billion for the period under review, reflecting under reporting by the ministries expenditure return for the period under review. However, compared to the last FY., the Revenue collection increased by 9.8 per cent. Table 3: Government Revenue and External Grants, Period Ending 30 th September, 2017 (Ksh Million) 2016/ /18 Deviation Deviation Actual KShs. in Actual Target percentage Total Revenue (a+b) 313, , ,022 (42,465) (10.94) (a) Ordinary Revenue 294, , ,822 (29,890) (8.52) Import Duty 19,969 20,974 23,925 (2,951) (12.33) Excise Duty 40,427 40,328 45,400 (5,072) (11.17) PAYE 68,038 72,446 89,598 (17,152) (19.14) Other Income Tax 72,817 84,799 81,905 2, VAT Local 47,106 48,897 49,385 (488) (0.99) VAT Imports 32,542 37,485 41,616 (4,131) (9.93) Investment Revenue 1, (574) (91.97) Traffic Revenue ,378 (834) (60.53) Taxes on Intl. Trade & Trans.(IDF Fee) 5,875 5,973 8,674 (2,701) (31.14) Others 1 5,603 9,436 8,316 1, (b) Appropriation In Aid 2 19,169 24,625 37,200 (12,575) (33.80) o/w Railway Development Levy 4,448 5,232 5,393 (161) (2.98) ( c) External Grants 1,478 1,597 10,780 (9,182) (85.18) Total Revenue and External Grants 315, , ,802 (51,647) (12.95) Total Revenue and External Grants as a percentange of GDP - 1/ includes rent of buildings, fines and forfeitures, other taxes, reimbursements and other fund contributions, and miscellaneous revenue. 2/ includes receipts from Road Maintenance Levy Fund and A-I-A from Universities Source: National Treasury 30. As a proportion of GDP, the total cumulative revenue and grants in the period under review amounted to 3.9 per cent compared to 4.2 per cent in the corresponding period of the FY 2016/17. External grants amounted to Ksh 1.6 billion against a target of Ksh 10.8 billion, representing an under performance of Ksh 9.2 billion.

19 Amount (kshs million) FISCAL DEVELOPMENTS Chart 10: Total Ordinary Revenue 180, , , , ,000 80,000 60,000 40,000 20,000 0 Sept-16 Period Sept-17 Source: National Treasury Import Duty Excise duty VAT Income Tax Other 2.2 Expenditure 31. The total expenditure and net lending for the period under review amounted to Ksh billion, against a target of Ksh billion. The shortfall of Ksh 43.4 billion was attributed to lower absorption recorded in both recurrent and development expenditures by the National Government and County Governments. (Table 4 and Chart 11). Recurrent expenditure for National Government amounted to Ksh billion (excl. Ksh 5.2 billion for Parliament and Judiciary), against a target of Ksh billion, with underperformance mainly recorded in wages and salaries, and pension which accounted for Ksh 6.3 billion, and Ksh 5.1 billion, respectively. 32. Foreign interest payments amounted to Ksh 17.3 billion, compared to Ksh 7.4 billion in the same period of the FY 2016/17. The domestic interest payments totalled Ksh 49.9 billion, which was higher than Ksh 42.5 billion paid in the corresponding period of the previous financial year. 12

20 Amount (kshs million) FISCAL DEVELOPMENTS Table 4: Expenditure and Net Lending, Period Ending 30 th September, 2017 (Ksh Million) 2016/2017 Actual 2017/18 Deviation % Growth Actual Targets 1. RECURRENT 230, , ,058 13, Domestic Interest 42,517 49,871 50,297 (425) 17.3 Foreign Interest 7,409 17,283 12,247 5, Pensions 13,828 13,954 19,153 (5,198) 0.9 Wages and Salaries 75,100 91,503 97,815 (6,312) 21.8 Operation and Maintenance 91, , ,547 20, O/W : Appropriation-in-Aid 15,009 19,089 26,469 (7,380) DEVELOPMENT 94,553 90,675 88,131 2,544 (4.1) Development Projects (Net) 53,768 69,955 45,740 24, Payment of Guaranteed Loans (368) (100.0) Appropriation-in-Aid 40,621 20,720 42,023 (21,303) (49.0) 3. County Governments 55,347 20,434 73,488 (53,054) (63.1) 4. Parliamentary Service 4,994 3,025 8,223 (5,198) - 5. Judicial Service 2,492 2,188 3,481 (1,292) - 6. Equalization Fund CF - 1,251 1, TOTAL EXPENDITURE 387, , ,631 (43,357) 6.4 Source: National Treasury Chart 11: Expenditure and Net Lending 140, , ,000 80,000 60,000 40,000 20,000 - Sept-2016 Period Sept-2017 Foreign Interest Pension Domestic Interest O&M Salaries Development Source: National Treasury 33. The total cumulative ministerial and other public agencies expenditure was Ksh billion against a target of Ksh billion (Table 5). Recurrent expenditure was Ksh billion against a target of Ksh billion, while development expenditure was Ksh 85.2 billion against a target of Ksh 97.1 billion. The percentage of total 13

21 FISCAL DEVELOPMENTS expenditures to the target was 93.3 per cent, while the percentage of total expenditures to the target for recurrent and development were 95.7 per cent and 87.7 per cent respectively, as at the end of the period under review. As indicated earlier, the discrepancy between actual and target expenditures partly reflect the non-capture of the sub-national expenditures and hence under reporting by Ministries. These ministerial expenditures are therefore, provisional. 34. As at the end of 30 th September, 2017, expenditures by the Ministry of Education, Science and Technology; Teachers Service Commission and Ministry of Health (Social Sector) accounted for 40.6 per cent of total recurrent expenditure. While the State Department for Interior, and Ministry of Defence accounted for 9.1 per cent and 11.3 per cent respectively. 35. Analysis of development outlay indicates that the Ministry of Energy and Petroleum (18.3 per cent) accounted for the largest share of the total development expenditures, followed by the Department for Infrastructure (14.3 per cent), Department of Transport (10.5 per cent) and the State Department Planning (10.1 per cent, mainly on NG-CDF). The development expenditures in large ministries were below the target because of non-inclusion of expenditures from some donor funded projects. 14

22 FISCAL DEVELOPMENTS Table 5: Ministerial Expenditures, Period Ending 30 th September, 2017 (Ksh Million) MINISTRY/DEPARTMENT/COMMISSIONS Sep-17 Variance Sep-17 Variance Sep-17 Variance % total Reccurent Development Total expenditure Actual* Target Actual* Target Actual* Target to total target 1011 The Presidency 1,773 2,173 (401) (257) 1,793 2,451 (658) State Department for Interior 19,942 26,611 (6,669) 1,858 4,295 (2,438) 21,800 30,907 (9,107) State Department for Correctional Services 3,846 5,384 (1,537) (220) 3,851 5,609 (1,757) State Department for Devolution (120) (574) (695) State Department for Special Programmes 1, , (38) 2,237 1, State Department for Planning and Statistics 1,279 1,347 (69) 8,617 9,215 (598) 9,896 10,563 (667) Ministry of Defence 24,738 25,894 (1,156) ,738 25,894 (1,156) Ministry of Foreign Affairs 498 4,335 (3,837) (499) 499 4,835 (4,336) State Department for Basic Education 21,127 14,629 6, ,573 (816) 21,884 16,202 5, State Department for Vocational And Technical Training (99) 2,952 1,087 1,866 3,513 1,747 1, State Department for University Education 16,643 11,779 4,864 1,541 2,423 (882) 18,184 14,202 3, The National Treasury 6,716 19,361 (12,645) 1,414 6,637 (5,223) 8,129 25,997 (17,868) Ministry of Health 5,243 6,686 (1,443) 2,561 4,904 (2,343) 7,804 11,590 (3,786) State Department for Infrastructure 10, ,384 12,140 20,465 (8,325) 22,995 20,936 2, State Department for Transport (28) 8,956 3,894 5,062 9,292 4,258 5, State Department for Marine time Affairs (25) (25) State Department for Housing & Urban Development (91) 2,478 2, ,819 2, State Department for Public Works (41) (475) (515) State Department for Water Services (71) 2,913 2, ,311 2, State Department for Irrigation (23) 2,736 2, ,852 2, State Department of Environment (24) (276) 1,225 1,525 (300) State Department for Natural Resources 1,766 1,818 (53) (50) 2,419 2,521 (103) Ministry of Lands and Physical Planning (90) (666) 800 1,556 (757) State Department for Information Communication and Technology & I (232) 3,781 4,050 (269) 3,869 4,369 (501) State Department for Broadcasting & Telecommunications (104) State Department for Sports Development (66) State Department For Arts And Culture (0) (96) (97) State Department of Energy ,559 7,825 7,734 16,043 8,287 7, State Department of Petroleum (19) (420) (439) State Department for Agriculture 1,107 1,571 (464) 1,630 2,225 (595) 2,737 3,796 (1,059) State Department for Livestock 923 1,258 (335) 687 1,170 (484) 1,609 2,428 (819) State Department for Fisheries and The Blue Economy (246) (225) (471) State Department for Investment and Industry (61) 939 1,332 (393) 1,458 1,911 (453) State Department for Cooperatives (34) (35) (69) State Department for Trade (348) 4 82 (77) (425) State Department for East African Integration (286) (286) State Department for Labour (237) (239) (476) State Department for Social Protection 958 2,351 (1,393) 2,942 3,740 (798) 3,900 6,091 (2,191) Ministry of Mining (283) (252) (534) Ministry of Tourism (94) (257) 1,098 1,450 (351) State Department of Public Service and Youth Affairs 5,167 3,335 1,832 4,978 3,248 1,731 10,145 6,583 3, State Department for Gender (291) (125) 845 1,261 (416) State Law Office and Department of Justice 840 1,073 (233) (283) 841 1,358 (517) The Judiciary 2,136 3,358 (1,222) 665 1,032 (367) 2,801 4,390 (1,589) Ethics and Anti-Corruption Commission (317) 906 1,009 (103) National Intelligence Service 10,768 6,651 4, ,768 6,651 4, Directorate of Public Prosecutions (180) 8 21 (13) (192) Registrar of Political Parties (110) (110) Witness Protection Agency (67) (67) Kenya National Commission on Human Rights (0) (0) National Land Commission (69) (2) (72) Independent Electoral and Boundaries Commission 15,000 14, (11) 15,000 14, Parliamentary Service Commission 1,444 2,932 (1,487) (621) 1,611 3,719 (2,108) National Assembly 2,452 5,292 (2,839) ,452 5,292 (2,839) Judicial Service Commission (54) (54) Commission on Revenue Allocation (42) (42) Public Service Commission (59) 6 15 (10) (69) Salaries and Remuneration Commission (24) (24) Teachers Service Commission 50,444 50, (30) 50,444 50, National Police Service Commission (40) - 16 (16) (56) Auditor General 854 1,282 (428) - 59 (59) 854 1,340 (487) Controller of Budget (47) (47) The Commission on Administrative Justice (41) (41) National Gender and Equality Commission (9) (9) Independent Policing Oversight Authority (97) - 38 (38) (134) Equalization Fund - Ministry of Water #DIV/0! 7051 Equalization Fund Energy #DIV/0! Total 218, ,578 (9,772) 85,186 97,121 (11,935) 303, ,699 (21,707) 93.3 *Provisional Source: National Treasury Guaranteed Loans to Parastatals Payments 36. Cumulative principal and interest payments of guaranteed loans to parastatals with liquidity problems amounted to Ksh million (principal of Ksh million and interest Ksh 23.5 million) against a payment target of Ksh million (Table 6) for period ending 30 th September,

23 Amount (kshs billion) FISCAL DEVELOPMENTS Table 6: Schedule and actual payments on Guaranteed Debt for the period ending 30 th September, 2017 (Ksh M) Borrower Quarter I Cumm. September 2017* Projected Actual Principal Interest Principal Interest Projected Actual EAPC TARDA KBC TOTAL (QTR) * Provisional Source: National Treasury 2.3 Fiscal Outturn 37. Between July 1, 2017 and September 30, 2017, cumulative overall fiscal balance (on a commitment basis and excluding grants), amounted to Ksh 66.7 billion (equivalent to 0.76 per cent of GDP) against a targeted deficit of Ksh 67.6 billion (equivalent to 0.77 per cent of GDP) (Chart 12 and Table 7). Over the same period in 2016, the fiscal deficit stood at Ksh 74.0 billion (equivalent to 0.99 per cent of GDP). Including grants, the fiscal balance (on a commitment basis) deficit stood at 0.74 per cent of GDP against a targeted deficit of 0.65 per cent of GDP. The Fiscal Outturns for the past years is provided as Annex I. Chart 12: Fiscal Balance as at September (100) Sep-16 Period Sep-17 Revenue Expenditure Deficit Source: National Treasury 16

24 FISCAL DEVELOPMENTS Table 7: Budget Outturn, Cumulative Ending 30 th September, 2017 (Ksh Million) Actual* Targets Actual Targets A. TOTAL REVENUE AND GRANTS 315, , ,802 (51,647) Revenue 313, , ,022 (42,465) Ordinary Revenue 294, , ,822 (29,890) Import Duty 19,969 20,974 23,925 (2,951) Excise Duty 40,427 40,328 45,400 (5,072) (0.25) Income tax 140, , ,503 (14,258) VAT 79,648 86,382 91,001 (4,620) Investment Revenue 1, (574) (96.55) Others 12,123 15,953 18,368 (2,415) Appropriation-in-Aid 19,169 24,625 37,200 (12,575) Grants 1,478 1,597 10,780 (9,182) AMISOM Receipts (78) (49.50) Revenue ,521 (1,774) Appropriation-in-Aid ,080 (7,330) Italian Debt Swap County Health Facilities - DANIDA B. EXPENDITURE and NET LENDING 387, , ,631 (43,357) Recurrent 237, , ,762 7, Domestic Interest 42,517 49,871 50,297 (425) Foreign Interest 7,409 17,283 12,247 5, Pension 13,828 13,954 19,153 (5,198) Wages and Salaries 75,100 91,503 97,815 (6,312) O & M/Others 98, , ,251 14, Development and Net Lending 94,553 90,675 88,131 2,544 (4.10) Equalization Fund County Governments 55,347 20,434 73,488 (53,054) (63.08) CF 0 1,251 1, C. DEFICIT EXCL.GRANT (Commitment basis) (73,968) (66,717) (67,609) 892 (9.80) (0.76) (0.77) (0.99) D. DEFICIT INCL.GRANTS (Commitment basis) (72,490) (65,120) (56,829) -8,290 (10.17) (0.74) (0.65) (0.97) E. ADJUSTMENT TO CASH BASIS -16,346 7,958-7,958 (148.69) (0.22) F. DEFICIT INCL.GRANTS (Cash basis) (88,836) (57,162) (56,829) -332 (35.65) (0.65) (0.65) (1.19) G. FINANCING 88,836 57,162 56, (35.65) Foreign financing 39,165 7,456 17,034 (9,578) (80.96) Disbursements 47,231 16,529 29,710 (13,182) (65.00) Programme Loans Project Cash Loans 1,247 2,094 6,499 (4,405) Project Loans AIA 8,188 14,191 23,212 (9,021) Project Loans SGR _PHASE_1&2A_AIA 27, (99.12) Project Loans SGR _PHASE_2B_AIA Commercial Finanacing 10, (100.00) O/W syndicated loan 10, (100.00) Debt repayment - Principal (8,065) (9,073) (12,677) 3, (0.10) (0.14) (0.11) 2. Other Domestic Financing NET DOMESTIC FINANCING 49,431 49,176 39,321 9,855 (0.52) MEMO ITEM GDP ESTIMATE 7,435, ,804, ,804, *Provisional Source: National Treasury 2016/2017 Actual 2017/2018 Deviation % growth 2017/2018 as a % of GDP 2016/2017 Actual as a % of GDP 2.4 Financing External Financing 38. Cumulative external financing for the period between July 1 st 2017 and September 30 th 2017 amounted to a net borrowing of Ksh 7.5 billion (Table 8). Total disbursements (inflows) including Appropriations-in-Aid amounted to Ksh 16.5 billion for the period ending 30 th September, 2017 against a target of Ksh 29.7 billion. The actual disbursement amount included Ksh 2.1 billion Project cash loans, Ksh 14.2 billion project loans A.I.A. and Ksh million project loans A.I.A. for SGR. External repayments (outflows) of principal debt amounted to Ksh 9.1 billion. The amount comprises of principal repayments due to both bilateral and multilateral organizations amounting to Ksh 5.3 billion, Ksh 3.7 billion, respectively. 17

25 Amount (kshs million) FISCAL DEVELOPMENTS Table 8: External Financing, Period Ending 30 th September, 2017 (Ksh Million) Quarter I 2016/17 Quarter I 2017/18 Cumulative September 2017* Actual Actual Target DISBURSEMENTS: 47, , , , Project Cash loans 1, , , , Project loans A-I-A 8, , , , Project Loans SGR _PHASE_1&2A_AIA 27, Project Loans SGR _PHASE_2B_AIA Commercial Financing 10, O/W syndicated loan Export Credit Programme Loans EXTERNAL REPAYMENTS: 8, , , , Bilateral(incl. Italy Debt SWAP) 3, , , , Multilateral (excl. IMF) 4, , , , Commercial NET FOREIGN FINANCING 39, , , , Source: National Treasury Domestic Financing 39. By the end of September 2017, net domestic borrowing amounted to Ksh 49.2 billion against a target borrowing of Ksh 39.3 billion (Table 7). The borrowing comprised of Ksh 12.6 billion from Commercial Banks, Ksh 26.3 billion from Non-Banking Financial Institutions, Ksh 1.9 billion from Non Residents, and Ksh 8.3 billion from the Central Bank of Kenya, (Table 9). Comparatively, for the same period in 2016, the net domestic borrowing amounted to Ksh 49.4 billion, comprised of net repayments of, Ksh 24.6 billion to the Central Bank of Kenya, and Ksh 873 million to Non-Residents, a borrowing of, Ksh 37.4 billion from commercial banks and Ksh 37.5 billion from nonbanking financial institutions (chart 13). Chart 13: Domestic Financing 60,000 50,000 40,000 30,000 20,000 10,000 - (10,000) (20,000) (30,000) Sept-2016 Period Sept-2017 CBK Commercial Bank Non Banks & Non Residents Total Source: Central Bank of Kenya 18

26 FISCAL DEVELOPMENTS 40. The stock of Treasury Bills held by Non- Banks and Non-Residents recorded net increase of Ksh 1.7 billion, and Ksh 1.3 billion respectively, while the stock of Treasury Bills held by Commercial Banks decreased by Ksh 23.5 billion. The stock of Fixed Rate Bonds held by Commercial Banks, Non-Residents and non-banks recorded a net increase of Ksh 36.1 billion, Ksh 1.0 billion, and Ksh 33.2 billion respectively. Table 9: Domestic Financing, Period Ending 30 th September, 2017 (Ksh Million) SEPTEMBER DECEMBER MARCH JUNE SEPTEMBER CENTRAL BANK (24,582) 37,830 35,840 (22,370) 8,300 Overdraft (40,884) (14,271) (13,934) (44,204) 24,717 Treasury bills rediscounts Fixed rate Bonds Items on Transit (27) (57) (52) (37) (21) Frozen Account - - (555) (555) - Less Govt Deposits 16,329 52,158 50,380 22,426 (16,396) 2.COM. BANKS 37,357 18,858 12, ,536 12,618 Advances , Treasury bills 17,528 (10,647) (28,561) 53,818 (23,450) Fixed rate Bonds 29,011 24,219 22,162 99,764 36,097 Special Bonds (5,000) - Zero Coupon bonds Infrastructure Bonds (6,933) 6,147 10,291 10,291 (8,967) Savings and Development Bond Less Govt Deposits (2,493) (1,136) 8,282 5,155 8, NON BANKS 37, , , ,676 26,317 Treasury bills 10,704 44,574 60,341 98,820 1,723 Fixed rate Bonds 33,055 44,471 49,071 38,722 33,189 Zero Coupon bonds Infrastructure Bonds (6,230) 17,774 22,983 22,983 (8,843) Savings and Development Bond M-Akiba Bond NON RESIDENTS (873) 1,088 1,372 1,917 1,940 Treasury bills (1,695) (363) (142) (356) 1,317 Fixed rate Bonds 822 1,115 1,179 1,938 1,019 Infrastructure Bond (0) (396) Savings and Development Bond Zero Coupon bonds NET CREDIT 49, , , ,760 49,176 Note: Treasury bills as reflected here are given at cost value as opposed to Table 11 given at Face value. Source: Central Bank of Kenya 3.0 PUBLIC DEBT 3.1 Overall Debt Position 41. The gross public debt increased by Ksh billion, from Ksh 3,709.3 billion as at end of September 2016 to Ksh 4,486.8 billion by 30 th September 2017, comprising of 51.5 per cent of External debt and 48.5 per cent of Domestic debt. The overall increase is attributed to increased external debt due to exchange rate fluctuations and, disbursements from external loans debt during the period. Net public debt increased by Ksh billion, from Ksh 3,276.7 billion as at end of September 2016 to Ksh 4,049.0 billion by end of the period under review (Table 10). 19

27 Amount (kshs million) FISCAL DEVELOPMENTS Table 10: Kenya s Public and Publicly Guaranteed Debt, September 2015 to September 2017 (Ksh million) Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sept. 17* EXTERNAL BILATERAL 482, , , , , , , , ,064 MULTILATERAL 754, , , , , , , , ,814 COMMERCIAL BANKS 295, , , , , , , , ,231 SUPPLIERS CREDIT 17,788 16,516 16,359 16,628 16,628 15,302 11,210 15,914 17,089 SUB TOTAL 1,550,233 1,615,183 1,617,506 1,796,198 1,854,711 1,896,443 2,101,391 2,294,736 2,310,198 DOMESTIC: CENTRAL BANK 107, , ,648 99,856 58,945 85,528 85,316 55,061 79,201 COMMERCIAL BANKS 682, , , , , , ,803 1,141,889 1,148,296 TOTAL BANKS 790, , ,336 1,027,163 1,028,735 1,032,559 1,061,119 1,196,950 1,227,497 NON BANKS & NON RESIDENTS 597, , , , , , , , ,098 SUB-TOTAL 1,387,966 1,540,017 1,646,527 1,815,133 1,854,555 1,930,973 1,944,953 2,112,265 2,176,595 GRAND TOTAL GROSS 2,938,199 3,155,200 3,264,033 3,611,331 3,709,266 3,827,417 4,046,344 4,407,001 4,486,793 LESS ON-LENDING (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) (5,701) LESS GOVERNMENT DEPOSITS (208,869) (305,496) (320,041) (394,856) (426,911) (373,016) (364,909) (428,774) (432,113) GRAND TOTAL NET 2,723,628 2,844,004 2,938,291 3,210,775 3,276,654 3,448,699 3,675,734 3,972,526 4,048,978 *Provisional Source: National Treasury 3.2 Domestic Debt 42. The stock of gross domestic debt increased by Ksh billion from Ksh 1,854.6 billion in September 2016 to Ksh 2,176.6 billion in September The stock of Treasury Bills held by Central Bank, Commercial Banks, Non-Banking Financial Institution and Non Residents increased by Ksh billion from Ksh billion in September 2016 to Ksh billion in September 2017, (Table 11). The total stock of Treasury Bonds, Floating, Fixed Rate, Special and Zero coupon Bonds, increased by Ksh billion from Ksh billion in September 2016 to Ksh 1,025.2 billion in September 2017, (Chart 14). Chart 14: Domestic Debt Stock by Instruments 1,200,000 1,000, , , , ,000 - Sept-2016 Period Sept-2017 Others Pre OD Treasury Bills Fixed R.T.Bonds Source: Data from CBK 20

28 FISCAL DEVELOPMENTS Table 11: Stock of Domestic Debt, by end September 2017 (Ksh million) Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 1.CENTRAL BANK 107, , ,648 99,856 58,945 85,528 85,316 55,061 79,201 Overdraft 45,924 45,233 46,455 44,204 3,319 29,933 30, ,717 Frozen Govt Accounts 26,676 26,114 26,114 25,559 25,559 25,559 25,004 25,004 24,449 Treasury bills / bonds rediscounts 25,545 20,588 20,588 20,588 20,588 20,588 20,588 20,588 20,588 Items on Transit Fixed rate bonds 9,445 9,426 9,426 9,426 9,426 9,426 9,426 9,426 9,426 2.COM.BANKS 682, , , , , , ,803 1,141,889 1,148,296 Advances 1,717 5,446 5,559 5,093 5,530 5,857 5,657 11,020 15,977 Stocks - Treasury Bills 172, , , , , , , , ,905 Floating Rate T. Bonds - Fixed Rate T. Bonds 373, , , , , , , , ,061 Special Bonds 10,000 10,000 10,000 10,000 10,000 10,000 10,000 5,000 5,000 Zero Coupon Bonds - Savings and Development Bond 7,648 7,648 7,648 7,648 7,648 7,648 7,648 7,648 7,648 Infrastructure Bonds 117, , , , , , , , , NON BANKS 586, , , , , , , , ,962 Stocks Treasury Bills 61, , , , , , , , ,742 Floating Rate T. Bonds Fixed Rate T. Bonds 393, , , , , , , , ,708 Tax Reserve Certificate Zero Coupon Bonds Infrastructure Bonds 110, , , , , , , , ,464 Savings and Development Bond 20,580 20,580 20,580 20,580 20,580 20,580 20,580 20,582 20,580 M- Akiba Bond NON RESIDENTS 11,533 12,580 11,958 13,027 12,020 13,632 21,543 22,100 24,136 Treasury Bills 7,469 8,132 6,370 6,608 4,760 6,069 6,322 6,122 7,567 Floating Rate T. Bonds - Fixed Rate T. Bonds 3,611 3,994 5,135 5,966 6,806 7,110 7,174 7,934 8,955 Zero Coupon Bonds - Savings and Development Bond Infrustructure Bonds ,037 8,037 7, TOTAL DEBT 1,387,966 1,540,017 1,646,527 1,815,133 1,850,129 1,926,189 1,944,953 2,112,265 2,176, LESS ON-LENDING 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5,701 5, Less Govt Deposits 208, , , , , , , , , NET DEBT 1,173,395 1,228,821 1,320,785 1,414,577 1,417,518 1,547,472 1,574,343 1,677,790 1,738,780 NOTE: Treasury Bills reflected here are at face value as opposed to Table 9, given at cost Source: Central Bank of Kenya 3.3 External Public Debt 43. In dollar terms, external public debt stock increased by US $ 4,216.1 million from US$ 18,155.1 million in September 2016 to US$ 22,371.2 million by end of September 2017 (Table 12 and Chart 15). The debt stock comprised 32.1 per cent, 36.5 per cent, 30.7 per cent and 0.7 per cent of debt owed to bilateral, multilateral institutions, Commercial Banks and suppliers credit, respectively. This increase is attributed to disbursements made during the period. 21

29 FISCAL DEVELOPMENTS Table 12: Kenya s External Public and Publicly Guaranteed Debt September September 2017 (US $ Million) CREDITOR Sep-15 Dec Mar Jun-16 Sep-16 Dec-16 Mar-17 June 2017* Sept. 2017* BILATERAL AUSTRIA BELGIUM CANADA DENMARK FINLAND FRANCE GERMANY ITALY JAPAN , NETHERLANDS UK USA CHINA 2, , , , , , , , , OTHERS TOTAL BILATERAL 4, , , , , , , , , MULTILATERAL ADB/ADF 1, , , , , , , , , BADEA EEC/EIB IBRD IDA/IFAD 4, , , , , , , , , IMF** OTHERS TOTAL MULTILATERAL 7, , , , , , , , , COMMERCIAL BANKS 1/ 2, , , , , , , , , EXPORT CREDIT GRAND TOTAL 14, , , , , , , , , In percentage of total BILATERAL MULTILATERAL COMMERCIAL BANKS 1/ EXPORT CREDIT TOTAL *Provisional ** include IMF item Source: National Treasury 22

30 Amount (US$ million) FISCAL DEVELOPMENTS Chart 15: External Public Debt 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Sept 2016 Sept 2017 Period Source: National Treasury Commercial Banks Suppliers Credit Bilateral Multilateral External Debt Service 44. At the end of September 2017, the total cumulative debt service payments to external creditors amounted to Ksh 26.4 billion. This comprised of Ksh 9.1 billion (34.4 per cent) principal and Ksh 17.3 billion (65.6 per cent) interest (Table 13 and chart 16). Chart 16: External Debt Service by Creditors September, % 68% 12% Bilateral Multilateral Comercial Creditors Source: National Treasury 23