AUSTERITY

Treasury considering further budget cuts on low revenue collection

Yatani lamented that no change has been felt in public spending despite numerous austerity measures effected.

In Summary
  • The plans for a second supplementary budget is coming just two months after the Parliament made changes to the budget read June last year.
  • Kenya is targeting a budget deficit of 5.6 per cent this financial year , down from 7.7 per cent in the previous years.
Acting Treasury Cabinet Secretary Ukur Yatani when he appeared before Senate Finance Committee on 26/11/2019 over pending bills/ Ezakiel Aminga
Acting Treasury Cabinet Secretary Ukur Yatani when he appeared before Senate Finance Committee on 26/11/2019 over pending bills/ Ezakiel Aminga

Kenya is planning yet another supplementary budget to further cut  and reallocate funds due t low revenue collection.

Addressing  senior public accounting officers during the Prudent Financial Management workshop yesterday, Treasury CS Ukur Yatani said there was need for more austerity measures and asked for efficiently use of state funds.

He hinted at a second supplementary budget for the year ending June 30, but did not give further information.

 
 
 

''Low revenue collection and pressure to cut on borrowing leaves us with no option but to up austerity measures. I cannot rule out the possibility of a second supplementary budget,'' Yatani said.

The plans for a second supplementary budget is coming just two months after the Parliament made changes to the budget read June last year.

In mid-November, the exchequer requested Sh86.6 billion or a three per cent rise in spending for roads, health and projects that support the manufacturing sector but Parliament’s Budget and Appropriations Committee slashed the amount to Sh49.7 billion.

The Kimani Ichung'wa led committee said it anticipated low revenue collection, saying the Kenya Revenue Authority (KRA) may fall short of its collection target for the current financial year by at least Sh120 billion.

The first supplementary budget, effected a few months after budget reading lowered the fiscal deficit for the financial year to 5.9 per cent down from 6.3 per cent.

Kenya is targeting a budget deficit of 5.6 per cent this financial year , down from 7.7 per cent in the previous years.

Budgetary experts have accused the government of ramping up borrowing at a rate that will saddle future generations with too much debt. The government defends the borrowing, saying it is required to fund infrastructure.

 
 
 

Yesterday, a seemingly angry Yatani warned accounting officers that they will take individual responsibility for poorly spending of public resources.

He said no change has been felt in public spending despite numerous austerity measures in place.

''I haven't seen much change. In terms of foreign travel, holding meetings in Mombasa away from here, there has been deliberate attempt to ignore the directive we have given,'' Yatani said.

He cited reckless use of public resources especially in June when ministries and state departments rush o exhaust funds before the close of the financial year. 

''We will be coming for accounting officers misusing funds. We want to personalise this matter,'' Yatani said.