Covid, Big 4 among priorities in Sh3.63 trillion Budget

Treasury CS Ukur Yatani is expected to read the 2021-2022 budget on Thursday,  before the National Assembly.

This year’s budget will be the second to be read under the Covid-19 pandemic, which has heavily affected the country’s economy.

In the Budget Finance Bill that was presented to Parliament for consideration, a Sh3.63 trillion budget was proposed, which the CS said will strike a balance between stimulating economic recovery and responding to the health challenges caused by the virus.

The CS has proposed to invest Sh26.6 billion on the Post-Covid Economic Stimulus Programme (PC-ESP) and Sh135.3 billion on the President’s Big Four Agenda.

Yatani has allocated Sh1.879 trillion to the Executive, Sh37 billion to the Parliament, and Sh17 billion to the Judiciary.

The revenue collected by KRA during 2020/21 FY was Sh1.84 trillion, and the authority has slightly collected more in the expected budget despite Covid disruption.

The external grants during the 2020/21 budget were Sh73 billion and have been slashed to Sh62 billion in the 2021/22 budget.

Recurrent expenditure in the current year was Sh1.83 trillion and has risen to Sh2.01 trillion in Yatani’s 2021/22 budget.

The total borrowing in 2020/21 -stood at Sh970.9 billion, higher than the 2021/22 budget, which is at Sh952.9 billion.

IEBC gets Sh1.1 billion for voter education, Sh2.8 billion for voter registration, and Sh3 billion above the current budget for the ICT unit.

The regional election coordination offices get Sh177 million more whereas the secretariat costs rise by Sh2.2 billion.

Purchases of materials and supplies for by-elections account for Sh1.6 billion among other increases for travel during voter registration and education.

On Tuesday, the Budget and Appropriations Committee chairperson Kanini Kega approved the Treasury’s allocation to the three arms of the government.

The proposed budget is slightly higher than the current financial year, which its budget was Sh2.8 trillion.

This year’s budget has boosted the allocation to the Big Four Agenda, compared to the Sh128.3 billion set aside for the same in the current FY.

Yatani had also set aside Sh50.3 billion for activities related to the Universal Health Coverage, Sh19.2 billion to the fight against HIV, malaria and tuberculosis and Sh15.5 billion was allocated to the housing.

Earlier this year, Yatani had proposed a higher recurrent expenditure of Sh1.975 trillion (15.8 per cent of GDP) from Sh1.776 trillion.

The Treasury has not provided cash for the referendum to implement the constitutional changes proposed under the Building Bridges Initiative.

The Independent Electoral and Boundaries Commission budget increases by Sh9.1 billion above its normal provisions, but not for the vote.

Development spending is on the other hand expected to reduce to Sh611 billion from Sh678.5 billion in the current financial year.

To finance the high spending, Kenya Revenue Authority is expected to collect Sh100 billion more which puts its next financial year's ordinary revenue target at Sh1.7 trillion.

This is despite the tax body struggling to hit its target in previous financial year's, with the current one proving to be an uphill task due to the pandemic.

The deficit will be financed by debt where the government plans to borrow slightly above Sh1 trillion with Sh572.7 billion to be sourced locally while foreign borrowing is pegged at Sh427.5 billion.

This year, the Treasury has been on the receiving end over the ballooning borrowing from outside.

Recently, the government received Sh255 billion loan facility from the International Monetary Fund, a move that caused uproar from members of the public.

The loan triggered a storm in the country with Kenyans accusing the government of too much borrowing with little to show for the huge debt burden.