Treasury to borrow Sh10.8bn for projects

The Treasury has bowed to pressure from MPs and will borrow Sh10.8 billion from domestic sources to meet the 2012/2013 Constituency Development Fund allocation.

The news was received with joy by MPs who have been pushing the Ministry of Finance to release the entire amount before the end of their term.

The Treasury has already released Sh10.8 million to constituencies out of the Sh21.7 billion allocated for the current financial year, leaving a balance of a similar amount.

MPs have, however, been pushing to have the remaining amount released before the end of December.

The matter was referred to the Cabinet for direction, where Finance Minister Njeru Githae was asked to see whether he could raise the balance immediately, although, according to the CDF Act, it is not due.

Mr Githae on Thursday said he will soon borrow the money from domestic sources and release it before December 31.

“I am going to borrow the Sh10 billion and pay the entire amount before December 31,” he said. The Treasury will then reduce domestic borrowing by a similar amount, he added.

“We are doing this so that MPs can complete their projects to avoid issues with new MPs after the General Election,” he said after delivering the ‘good news’ to the lawmakers.

The minister said the Treasury has experienced a shortfall in revenue collection of Sh43 billion and has been unable to meet many expectations.

He blamed the situation on heavy demands on the Exchequer from various quarters, citing the push for salary increases from various groups in the public service.

Rangwe MP Martin Ogindo, a member of Parliament’s Budget Committee, welcomed the decision, saying, extraordinary times call for extraordinary measures.

He said MPs have a contract with their constituents and need the funds to complete projects already under way.

He urged Mr Githae to expedite release of the funds. “This is because we need to be involved in the implementation of the projects,” he said.