Kenya raised its domestic borrowing target by 29 percent in the current fiscal year after the government came under pressure to increase salaries for public workers and boost spending on internal security.
Kenya plans to borrow 137.2 billion shillings ($1.6 billion) from the debt market in the 12 months through June, higher than the 106.7 billion shillings set out in the budget, the Nairobi-based Finance Ministry said in its 2013 Budget Policy Statement published on its website and dated Jan. 4.
The East African nation last year agreed to increase wages for teachers, lecturers, health workers and police to end strikes, while the government also boosted security expenditure after sending troops into neighboring war-torn Somalia in 2011. The added spending pressures total 190 billion shillings, according to the ministry statement.
The government raised 103.2 billings shillings through domestic Treasury bill and bond auctions in the five months through November, overshooting a target of 71 billion shillings, according to the statement. Foreign financing in the period totaled 5.6 billion shillings, against a target of 33.7 billion shillings, it said.
Increased government bond sales may lead investors to demand higher yields in the first quarter, Leon Myburgh and Coura Fall, analysts at Citigroup Inc., said today in an e- mailed statement.
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