Treasury unable to justify unallocated Sh45bn in budget

Finance Committee however said there is no cause for alarm as statement can be amended

In Summary

• Treasury put the budget at Sh4.188tn, yet allocations amounted to Sh4.143tn

• Karachuonyo MP Okuome Adipo faulted it for giving ‘half-baked’ information

National Treasury PS Chris Kiptoo
National Treasury PS Chris Kiptoo
Image: FILE

The National Treasury has found itself in a tight spot after it failed to convince Members of Parliament why there was an extra Sh45 billion in the proposed 2024-25 budget that has not been allocated any function.

Treasury PS Chris Kiptoo was put to task to explain why the funds allocated to the various government arms were short by Sh45 billion from the figure issued as the total budget for the financial year.

In the Budget Policy Statement, Treasury had issued the final figure of budget at Sh4.188 trillion. 

However, the sum allocated to the Executive, Judiciary, counties, Parliament and Consolidated Fund only amounted to Sh4.143.

The MPs demanded to know why the final budget had the excess.

The Budget Policy Statement is a government policy document that sets out the broad strategic priorities and policy goals to guide the national government and county governments in preparing their budgets for the subsequent financial year and over the medium term.

While appearing before the  Committee on Finance and National Planning, the PS acknowledged that there is Sh45 billion that's yet to be allocated.

He could not explain what it was to be allocated for.

Committee chair Kimani Kuria, who is also the MP for Molo, questioned why there should be different projections by the same ministry for the same budget.

"The overall expenditure and net lending is projected at Sh4.182 trillion," Kuria said.

"The table you provided has National Executive allocation of Sh2.5 trillion, Consolidated Fund of Sh1.2 trillion and county governments disbursements of Sh391 billion.

"So the total is Sh4.133 trillion, which is different from the overall expenditure by a difference of Sh45 billion."

In an attempt to explain, Kiptoo said the variation was coming from a higher projection in the fiscal framework, especially on Appropriations in Aid.

The PS said Treasury has been pushing the A in A issue alone, and this is why there was a higher projection, but it should be harmonised.

"A in A projection is slightly higher than the ministry's projection,” Kiptoo said.

"We didn't want to lose what the sector working group had projected, and we also worked on what the ministry gave us as expenditure to be funded by A in A for the Railway Development Levy and Petroleum Development Levy. That's why we have that lower number."

However, the committee was not contented with the reply.

Kuria questioned why he didn't see where the A in A was coming from.

He said once they summed up the expenditure of the national government, Consolidated Fund and county government, it should inform the total expenditure.

“That means there is Sh45 billion surplus somewhere that either should be taken out or you tell us what it is supposed to be approved for,” Kuria said.

“Because as it looks, there is no vote for that extra amount. It's hanging. Unless you want to admit there is an error, I don't know why A in A is coming in. What is our budget?”

The PS said: “I think we will go with the higher figure, and we can provide clarification for it.

“The team needs to work on the numbers. I think the deficit you see is based on the higher numbers. This is financing, that's why we are talking about revenue projections, expenditure projections, and the deficit is what you see there.”

Karachuonyo MP Okuome Adipo faulted the Treasury for giving ‘half-baked’ information to the committee.

The committee noted that there is still no cause for alarm because this is still the Budget Policy Statement, which can be corrected afterwards with budget estimates.

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