AUSTERITY MEASURES STIFLED?

State to spend Sh80bn more in 2018-19 supplementary budget

Allocations for different sectors either increased or reduced, factoring in discussions on the Supplementary Estimates II for the current financial year ending June 30

In Summary

• MPs concerned that a significant increase in the recurrent budget could undo the gains of the austerity measures

• Among the biggest losers in the cuts is the Senate

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

The government has increased its 2018-19 spending by Sh80 billion, defeating efforts by President Uhuru Kenyatta to have the Treasury institute austerity measures.

While the recurrent budget has increased by Sh79.9 billion, that of development budget has equally gone up by Sh1.24 billion.

Parliament approved the adjustments to the estimates allowing the same to be printed as a bill for release of funds from the exchequer.

The move has seen allocations for different sectors either increased or reduced, factoring in discussions on the Supplementary Estimates II for the current financial year ending June 30.

The Budget and Appropriations Committee says it is concerned that such a significant increase in the recurrent budget could undo the gains of the austerity measures instituted under Supplementary Estimates I.

The Kimani Ichung’wa-led committee sounded an alarm that the adjustments are to cater for salary shortfalls and operations expenses.

“These are issues that should have been foreseen and adequate budgetary provisions put in place at the beginning of the budget process,” the Kikuyu MP said in his report tabled in Parliament on Thursday last week.

Core to the changes is an allocation of Sh10.4 billion for payment of pending bills, ostensibly in line with Uhuru’s Madaraka Day directive that the Treasury prioritise what is owed to suppliers and contractors.

Among the biggest losers in the cuts is the Senate, which has lost its bid for Sh500 million for oversight of county governments.

The Salaries and Remuneration Commission, which has challenged MPs’ house allowance, has lost Sh120 million in the changes.

This is factoring a decrease of Sh2.85 million for domestic travel, Sh2 million for other operating expenses, Sh20.4 million for the refurbishment of buildings, Sh99 million for purchase of vehicles, and Sh1.13 million for office furniture.

 
 

Parliament also hived off Sh1.16 billion from the energy docket, money that was meant for payment of penalties that arose from non-evacuation of electricity from Turkana Wind Power project.

TVET is the biggest gainer in the reallocations, having a proposed sum of Sh2.74 billion for equipping of technical institutions across the country.

Housing, which is a key pillar of President Uhuru Kenyatta’s Big Four plan, got Sh1.8 billion more to regularise additional conditional allocations to the counties from the World Bank. Also added to the housing kitty is Sh50 million for hosting the UN-Habitat.

The Transport ministry got Sh710 million for completion of works to strengthen budget implementation. Close to this is an allocation of Sh250 million to the Roads docket for the European Union Missing Links road project.

On the flip side, Parliament reallocated Sh300 million for construction of Rabai-New Bamburi-Kilifi power transmission lines.

The Judiciary got Sh68 million for tribunal operations, whereas the DCI got Sh50 million to bolster investigations.

Sh300 million has been reallocated to the Devolution ministry for purchase of relief food and a similar amount has been reallocated to the Registrar of Political Parties.

Livestock farmers who have been pushing the government to clear their pending bills also got a reprieve after an increment of Sh147 million allocated to the Kenya Meat Commission for payment of their dues.

Jaramogi Oginga Odinga University got Sh40 million for the construction of a tuition block on its main campus in Bondo.

KNHRC employees also gained after the Budget committee reallocated Sh5 million it intended to spend on refurbishing offices towards payment of staff medical scheme (Sh1.2 million), domestic travel (Sh3.3 million), and internet services (Sh500,000).

Even as the House voted to approve the adjustments, the committee raised concerns that there is no clear path on how the government would raise the additional funds.

“Given the poor outlook for revenue collection in the last quarter of the financial year, the government may need to borrow in order to finance this expenditure increment,” the committee said.

“Should this be the case, it will be contravening the law since funds are borrowed to finance development projects but most of the increase here is in recurrent spending.”

They also flagged an anomaly in the Sh1 billion withdrawn from the Civil Contingency Fund that was used to support flood victims in 2018 without the approval of the Budget committee.

This is even as KRA underperformed by Sh97 billion in its revenue target having achieved Sh1.1 trillion against a target of Sh1.2 trillion as at March 2019.