•Recurrent expenditure estimated at Sh1.29 trillion.
•Development to take an estimated Sh666.5 billion.
National Treasury exceeded the approved ceiling for the 2021/2022 budget estimates, MPs have noted, as they moved to chop CS Ukur Yatani's proposals ahead of the final reading tomorrow.
The overall budget estimates had exceeded the approved ceiling by Sh14.11 billion, the Budget and Appropriation Committee said during the tabling of its report in Parliament.
This is mainly on account of increased Consolidated Fund Services spending by Sh20.83 billion as well as the Parliament budget which was higher by Sh8.7 billion from the Budget Policy Statement(BPS) ceiling.
Even so, the Kieni MP Kanini Kega led committee has commended the National Treasury for a modest increase as opposed to previous years, where it says BPS ceilings were routinely flouted and the budget increased “in total disregard of the approved budget framework.”
National Treasury had set the overall budget for the next financial year starting July 1, at Sh3.66 trillion, compared to the current financial year's Sh2.8 trillion, for the year ending June 30.
Of the planned spending, Treasury had proposed Sh1.29 trillion trillion to go into recurrent expenditure with development taking Sh666.5 billion.
The executive gets the lion share among the three arms of government with a Sh1.89 trillion allocation. Parliament and Judiciary will get Sh37.9 billion (revised downwards) and Sh17.8 billion, respectively.
On Tuesday, the committee raised concerns on the policy direction for the next budget noting that despite the government implementing a post-Covid Economic Recovery Strategy, the key performance indicators and targets have not been clearly articulated and specified in the proposed budget.
“This makes it difficult for the government to monitor the projects/programmes being implemented under the post-covid economic recovery strategy,” it says in a report tabled on Tuesday.
It has made adjustments on allocations in the final approved budget to be read tomorrow by CS Yatani.
To fund the budget, Treasury projects a total revenue collection of Sh2.039 trillion, an increase by approximately Sh210 billion from the current financial year.
Of this, Kenya Revenue Authority is expected to collect at least Sh1.776 trillion in ordinary revenue up from Sh1.574 trillion, with the rest being Appropriation-in-Aid (A.i.A).
Consolidated Fund Services expenditure will amount to an estimated Sh1.33 trillion which is higher from the current financial year by about Sh200 billion.
The high spending plan comes with a push to increase the country's debt ceiling currently at Sh9 trillion.
Total debt stands at Sh7.33 trillion leaving little room to borrow to bridge the budget deficit.
Former committee chairman Kimani Ichungua has termed the budget “overly ambitious” as he notes the pandemic is likely to deny the taxman the set revenue targets, a move likely to widen the budget deficit and increase borrowing.
According to Treasury, the budget is anchored on a GDP growth projection of 6.3 per cent in the 2021/22 financial year and 6.1 per cent in the medium.
Key drivers of this growth are a stable macroeconomic environment, improved domestic consumption and improved external demand.
Further, export demand is expected to increase due to the reopening of economies globally as vaccination continues to gain traction.
Winners in the next financial are expected to be education which has a proposed budget of Sh510 billion up from Sh505 billion, energy, infrastructure and ICT (Sh401.3 billion from Sh362.7 billion) , national security (Sh170 billion from 154.3 billion) and health (Sh119.9 billion from Sh111.7 billion).
“The energy, infrastructure and ICT sector plays a significant role as a driver and an enabler in the implementation of the Big Four Action Plan,” CS Yatani had said in the BPS.
Spending in general economic and commercial affairs which covers manufacturing, trade and other related sectors is however expected to reduce with Treasury cutting spending to Sh23 billion from Sh27.9 billion.
Expenses on environment protection, water and natural resources has also been cut to Sh102.8 billion from Sh105.2 billion.
As yatani presents the final budget tomorrow, he is expected to balance between post-Covid economic recovery and implementation of President Uhuru Kenyatta's Big Four Agenda.