CRISIS LOOMS

MPs raise alarm as Treasury fails to budget for food reserves

Sh4.3 billion was allocated in the Budget Policy Statement has not been reflected in the 2019-20 proposed budget estimates.

In Summary

• The reserves were allocated Sh4.3 billion in the Budget Policy Statement but this has not been reflected in the financial year 2019-20 proposed budget estimates.

• The National Treasury slashed by more than half, the allocation meant for subsidised fertiliser giving it only Sh2 billion compared with the Sh4.3 billion allocated last year

Treasury cabinet Secretary Henry Rotich with the budget briefcase outside Treasury
Treasury cabinet Secretary Henry Rotich with the budget briefcase outside Treasury
Image: FILE

Lawmakers have sounded an alarm of the country’s susceptibility to a food crisis after the government failed to allocate funds to the Strategic Food Reserve.

The reserves were allocated Sh4.3 billion in the Budget Policy Statement but this has not been reflected in the financial year 2019-20 proposed budget estimates.

The Budget and Appropriations Committee has warned that the situation could worsen in the wake of the erratic performance of the April-May-June long rains.

 

“It is, therefore, not clear how the government intends to manage the national food reserves,” the committee chaired by Kikuyu MP Kimani Ichung’wa said in its report on the proposed budget estimates.

In another worrying move, the National Treasury slashed by more than half, the allocation meant for subsidised fertiliser giving it only Sh2 billion compared with the Sh4.3 billion allocated last year.

“Despite the insufficient supply, the programme has been marred by challenges of poor distribution, poor timing, and quality concerns,” the team said.

The country is already facing a shortage of maize pushing the price of 2kg packet of flour to Sh120 from about Sh80 a month ago.

The government has pledged to release two million bags of maize to curb the rising flour prices, but questions remain on whether it has sufficient funds to sustain the supply.

Agriculture CS Mwangi Kiunjuri recently told journalists that the ministry intended to purchase two million bags at between Sh2,500 to Sh3,000 to curb the shortage.

The budget team attributes the crisis to the failure to adhere to parliament’s resolutions on the BPS, a matter it says has persisted over the years.

 
 

“This distorts policy implementation by the government and has rendered the BPS a document of the willing,” the report reads in part.

The lawmakers further reprimanded the National Treasury over the mismanagement of pending bills and stalled projects saying their continued existence undermines the budget.

The committee said it is concerned that almost all ministries, state departments, and agencies have pending bills escalating by the day.

“This is indicative of fiscal indiscipline. Under proper budgeting, every item should be budgeted for and paid in time,” the report reads. 

In the dossier, the lawmakers lamented the tendency where pending bills are left to accumulate for several years such that they have to be audited for validity.

The committee further reprimanded the Treasury for failing to rein in ministries still initiating new projects despite a cessation order by President Uhuru Kenyatta. 

The situation of stalled projects has been worsened in the wake of revelations some of them have no budgetary provisions yet the House had advised on regular updates for priority funding.

An uncontrolled influx of foreign contractors was also flagged amid concerns that they are too expensive, especially where they don’t bring any expertise.

The Ichung’wa team further castigated county governments over poor services at hospitals run by the devolved units saying the situation has prevailed despite massive funding.

“It was posited that no allocation on the conditional grants to counties be approved before a proper audit is carried out to ascertain the impact of the funds for the past four years,” the committee said.

Kenya Revenue Authority did not escape the committee’s censure after it was found out it has been spending Sh3 billion in agency fees at the source.

The committee conducted public forums in 12 counties namely Nyeri, Laikipia, Taita Taveta, Trans Nzoia, Uasin Gishu, Lamu, Kakamega, Kisumu, Isiolo, Embu, Wajir, and Bomet.

From the hearings, Kenyans said they want the 2019-20 spending focused on rehabilitating poor roads network, health, agriculture; water, sewerage, and drainage facilities; and social transfers.

MPs have proposed that the each of the counties be appropriated Sh100 million for various roads, hospitals, boreholes, among other projects as cited by locals.

 The Ichung’wa team has recommended that the Health Committee of the National Assembly and that of the Senate establish a framework for the oversight Level 5 hospitals, to solve current problems faced by the counties. 

It also asked the Treasury to come up with a framework for completion of stalled projects by October 1 as well as push for changes to the PFM Act to have entities that delay payments punished.

MPs have also called for an infrastructure audit in all public schools across the country within the next three months to identify gaps and prepare an action plan.

(Edited by O. Owino)