Kenya is set to embark on a budget making process for the next financial year even as it struggles to raise funds to meet this year’s ambitious budget of Sh3.1 trillion.
In a public notice, National Treasury has organized the launch of budget preparation process for the medium term period 2019/2020/2021/2022 to take place on Thursday this week at the Kenyatta International Convention Centre (KICC).
This is the second step of budget making process that is undertaken from September 1 to September 15 after Treasury has sent a circular to all government agencies starting the process and setting guidance for public participation on August 30 every year.
‘’The Public Finance Management Act also requires that by 30th August every year, the Cabinet Secretary issues a circular defining how the public can participate in the budget making process in line with Section 35 of the Public Finance Management Act,’’ Transparency International said.
According to TI, this is a very crucial process which determines the goals to be achieved, the expected revenues, expenditure and sources of raising revenue including debt, for the next government financial year.
Budget making process is supposed to end by June 30 when the Budget Appropriations Bill is finally passed by Parliament and county assembly to authorise spending for the new budget year.
The Thursday budget process making launch is coming at the time President Uhuru Kenyatta’s government is under intense public pressure to cut on taxation to ease high cost of living and stabilize economy after prolonged electoral period last year.
It is also under pressure to collect enough revenue to fund Big Four Agenda of: food security, universal health care and manufacturing. Kenya is also struggling to repay its outstanding public debt that crossed Sh5 trillion in August.
This week, IMF will be deciding if Kenya has met its fiscal policy targets to allow further access to precautionary facility of Sh150 billion that expires on September 14.
In the 2018 Budget Policy Statement (BPS) released by Treasury in February and pegged on Uhuru’s Big Four blue print, Kenya is targeting to increase its revenue collection including Appropriation-in-Aid from current Sh1.85 trillion that is 18.9 per cent of GDP to at least 25 per cent.
Even so, government expenditure is expected to shoot from this year’s target of Sh2.49 trillion to Sh2.89 trillion in 2021/22.