2019/2020 BUDGET

Treasury at 30 per cent in revenues target in current fiscal year

KRA has collected Sh498.31 billion in the four months to October, 27.5 per cent of Sh1.8 trillion excepted receipts to the end of the year

In Summary

•Commercial loans were projected at Sh200 billion in the year but no receipts have been received yet in the period.

•The total unspent balances held by the Treasury add to Sh2.21 billion in the four months.

The Treasury Building. Senate, National Assembly feud over funds for counties.
TREASURY BUILDING: The Treasury Building. Senate, National Assembly feud over funds for counties.
Image: FILE:

The government's revenue and net exchequer issues in the first four months of financial year 2019/2020 reached Sh803.12 billion, equal to 30.9 per cent of the target of the current fiscal year.

The current year's budget statement quoted an estimate of Sh2.59 trillion from tax receipts, loans and grants to finance the year's spendings.

However, in a gazette notice by the finance ministry, the report for the revenue figures from July to October may indicate the pressure to keep with the set targets through taxes and borrowing for the remaining two-thirds of the year.

 
 

Kenya Revenue Authority has so far collected Sh498.31 billion in the period, about 27.5 per cent of Sh1.8 trillion receipts to the end of the year.

Loans from a foreign government and international organisations were registered at Sh6.34 billion, 9.72 per cent of an estimate of Sh65.24 billion while grants to the country were Sh5.11 billion (35.3 per cent) against Sh14.47 billion.

The fiscal performance in the period may indicate a trailing budget deficit and awaiting debt accumulation if the tax authority fails to raise the revenue forcing the government to borrow.

In the last financial year ending June 2019, the fiscal performance was below target on account of revenue shortfalls and rising expenditure pressures, that saw the Treasury issue new expenditure controls on the ballooning debt.

The policy measures include rationalization on foreign and domestic travel, hospitality, training, communication supplies, printing and advertising, purchase of furniture, office and general supplies.

This also included the use of government vehicles and the size of the government delegation in meetings outside the country.

National Treasury Cabinet Secretary Ukur Yatani has also said the government would retire all the commercials loans in a move to maintain the public debt and ensure it does not soar to higher levels.

 
 

The total debt as at September was Sh5.968 trillion.

CS Yatani said the government will now focus on multilateral loans with lower interest rates to finance capital expenditures, over the commercial loans with interest rates of between eight to nine per cent.

In the notice, commercial loans were projected at Sh200 billion in the year but no receipts have been received yet in the period.

This means that an increase in pressure to seek more funding to cover planned budget expenditure for the rest of the year.

Even so, data on Kenya’s external loans show that the country holds a total of 12 commercial loans valued at Sh1.003 trillion priced at between one and 9.4 per cent annually, averaging 4.86 per cent.

The total unspent balances held by the Treasury are Sh2.21 billion in the four months, that will see an addition following surplus funds from state corporations.

Speaking to one of the local dailies, the CS said that state corporations had remitted Sh33 billion, about half of the targeted Sh78 billion, meaning available funds for developments.

This follows a directive under the new austerity measures.

Funding from the European Union to promote long-term peace, security and effective governance in Somalia (grants from AU Mission in Somalia) have been Sh1.94 billion against Sh5 billion at the end of the year.