News
Sh23 billion freeze in govt spending to hurt development projects
Finance minister Uhuru Kenyatta (right) and permanent secretary Joseph Kinyua. Mr Kenyatta has banned Treasury officials from commenting on policy issues. Photo/JENNIFER MUIRURI
Posted Saturday, April 4 2009 at 20:25
Already, President Mwai Kibaki has himself come out to argue against a freeze on development expenditure. A day after the Treasury circular was put out, the President instructed the ministry of Finance to spare the development budget from the cuts to ensure continuity in projects that spur economic growth.
He was addressing the National Economic and Social Council (NESC) at the Kenyatta International Conference Centre (KICC) in Nairobi. Mr Kibaki advised the Treasury to target non-strategic areas that would not interfere with the country’s renewed economic growth momentum.
Under the revised budget, the cuts will target the development budgets of the ministries of Roads, Energy, Defence, Finance, Local Government and Nairobi Metropolitan Development.
The development budgets of the ministry of Roads and that of Energy have been cut by Sh3 billion, Internal Securiy by Sh2 billion, Finance by Sh1.1 billion, and Nairobi Metropolitan Development by Sh1.3 billion.
With regard to the recurrent budget, the biggest loser is the National Intelligence Service whose budget has been cut by Sh1 billion. The current budget was prepared on the assumption that the economy would grow by 4.5 per cent.
These assumptions have, however, been adversely affected by the effects of the post-election violence, high oil prices and the global financial crisis.
By the end of the second quarter, economic growth averaged between 2.2 per cent and 2.5 per cent. In the circumstances, the government has predicted major revenue shortfalls.
Compounding the situation for the government are the effects of the prevailing drought and the recent emergencies that have placed a heavy demand for additional funds over and above the funds set aside in the current budget for drought and contingency.
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Submitted by KenpalPosted April 05, 2009 01:14 PM
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Submitted by Mishuki
cut the the prices of unga and give incentives to farmers for more maize production...this would add up to better education and less stress for parents to send their children to school...Com'n guyz this used to be the staple food for kenya.
Posted April 05, 2009 12:27 PM -
Submitted by karabu
When the economy was good, money from flowers, tea, tourism was coming, what you do is to invest. In schools, infrastruture etc. production from these would secure the economy. However, what we saw was far from this! Developed coutries salary level for MPs, wastage in fuel guzzlers and numerous cases of corruption like maize scandle, triton, Kemri etc. Next time when the economy is healthy, what we need is investment.
Posted April 05, 2009 12:14 PM -
Submitted by cashD
Reducing the number of Ministries would be one of the best ways to cut recurrent expenditure as well as consolidating some of the districts created for political expediency. It is primarily the government that has a huge expenditure, and if its size was cut in half that would create enouugh money for development needs.
Posted April 04, 2009 11:08 PM
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Why can't the government issue additional infrastructure bonds. The last one was a wild success. Does the CBK governor understand the need for an economy like ours to upgrade infrastructure and create jobs?