SUPPLEMENTARY BUDGET

Yatani adjusts 2020/21 budget as financial year ends

Cuts recurrent expenditure.

In Summary

•The CS has however increased development expenditure barely three weeks to the end of the current financial year, ending June 30.

•The Covid-19 pandemic form Yatani's basis of adjustments as captured in the second supplementary budget.

National Treasury CS Ukur Yatani /FILE
National Treasury CS Ukur Yatani /FILE

The government has made changes in the spending of the current financial year barely three weeks to its end.

National Treasury Cabinet secretary Ukur Yatani has cut recurrent expenditure while raising development spending with Covid-19 forming his main basis for the adjustments, tabled in Parliament a day before be presented the 2021/22 budget.

Ministerial national government expenditure has been slightly reduced ( by four per cent) to Sh1.963 trillion, from Sh1.971 trillion in an earlier supplementary budget.

This is a Sh8.6 billion reduction, but the total spending is still higher than original estimates (before supplementary budgets) which had been approved at Sh1.887 trillion.

Recurrent expenditure has been adjusted downwards in the second supplementary budget to Sh1.257 trillion.

Development expenditure however increases to Sh705.6 billion from an original Sh633.3 billion and Sh696.5 in the first supplementary budget, despite low absorption by both the national and county governments.

Consolidated Fund Services,which includes debt and pension, is set at Sh1.070 trillion, a downwards adjustment from Supplementary I, which had set it at Sh1.073.

The original approved estimates were however at Sh1.028 trillion.

His budget for the current financial year however stands at Sh3.03 trillion, an upward spending from the initial Sh2.9 trillion he presented during the budget reading in June last year.

According to Yatani, implementation of the financial year 2020/21 budget whose financial year ends on June 30, continues to face challenges due to effects of the Covid-19 pandemic on the different sectors of the economy and government operations.

“An increased demand for additional priority expenditure poses a challenge to the implementation of the ongoing projects,” Yatani says in the supplementary budget, the second in the current financial year.

The supplementary estimates have been prepared to take care of Covid-19 related expenditure, salary adjustments, adjustments in development partners financed projects and regularise approved additional expenditure and re-allocations, the CS notes.

In the current financial year to April 30, total cumulative revenue collected , including Appropriations in Aid (A-IA), amounted to Sh1.42 trillion (12 per cent of GDP) against a target of Sh1.46 trillion.

This reflects a shortfall of Sh45 billion as the Covid-19 pandemic ravaged the economy.

Total cumulative expenditure and lending, inclusive of transfer to county governments, amounted to Sh2.044 trillion against a target of Sh2.264 trillion for the period under review.

The shortfall of Sh219.7 billion was attributed to under absorption in both recurrent and development expenditure by the national and county governments.

Major budget increment includes an additional Sh6.5 billion to the health ministry's preventive, promotive and reproductive health unit, taking its budget to Sh30.4 billion.

“The additional is on account of provision for the Covid-19 vaccines,” Yatani says in the report.

The budget for power transmission and distribution, under the Energy ministry, has been sliced by Shh7.3 billion from an ealrier estimate of Sh63.8 billion.

The ministry's total spending estimates have been cut by Sh6.5 billion from Sh 85 billion.

CS Yatani who spelled out the next financial year's spending, starting July 1, is keen on post-Covid recovery, cut in wastage of public resources and reduction of the country's budget deficit.

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