Sh17bn for laptops to be diverted, says Rotich

What you need to know:

  • Treasury Cabinet Secretary Henry Rotich said money for projects which will not have started in March will be used in the supplementary budget.
  • Treasury is looking for money to keep the government going until the end of the financial year in June and one way of filling the holes is spending money for projects which are unlikely to get underway any time soon.
  • Besides paying for recurrent expenditure, including the growing public sector wage bill, the Sh57.1 billion will also be used to pay for projects whose financing has been affected after donors withdrew or were late to honour their pledges.

The Sh17.4 billion kept aside for primary school laptops will be spent on other uses in a review of the budget.

Treasury is looking for money to keep the government going until the end of the financial year in June and one way of filling the holes is spending money for projects which are unlikely to get underway any time soon.

The Jubilee administration had promised to issue each Standard One pupil with a free laptop. It is one of President Uhuru Kenyatta’s flagship projects. But it is yet to get off the starting blocks because of procurement disputes.

Treasury Cabinet Secretary Henry Rotich said money for projects which will not have started in March will be used in the supplementary budget.

Apart from the laptops, the secretary did not say which other projects will lose their money for this financial year. Presumably fresh money will be allocated in the next budget.

The re-allocation “will prevent last year’s last minute rush where state corporations returned unused funds just days before the reading of the Budget,” Mr Rotich told the parliamentary Budget committee where he tabled a supplementary budget of Sh57.1 billion, after cutting back from the initial Sh118.9 billion.

The National Treasury expects to raise Sh25 billion from slow moving projects to finance the supplementary budget. This means that Sh17.4 billion will come from the laptops projects alone.
Another source is the Sh4.9 billion allocated by Treasury to fund its stake in the National Bank of Kenya rights issue.

The National Treasury is taking that back and says the bank is now able to fund itself. The government will also be remitting Sh7.1 billion in unpaid taxes from the Treasury.
The balance, some Sh20.7 billion will be borrowed from financial institutions.

DONORS WITHDREW

Besides paying for recurrent expenditure, including the growing public sector wage bill, the Sh57.1 billion will also be used to pay for projects whose financing has been affected after donors withdrew or were late to honour their pledges. State corporations require an additional Sh6.7 billion to meet their wage bill obligations.

“The borrowing does not destabilise the financial markets and at the same time does not create debt sustainability issues,” said Mr Rotich “We have assessed the supplementary budget and found that it fits the budgetary allocation guidelines which demand that over 30 per cent of the moneys be used for development. The rest have been split between recurrent expenditure of 43 per cent and consolidated funds service of 26 per cent,” he said.

However, the chairman of the Budgetary Committee, the Rev Mutava Musyimi, challenged Mr Rotich’s presentation saying additional information was needed to explain why some ministries were asking for more money.

“We need a justification for the additional resources required by Ministries, Departments and Agencies, especially those with low absorption rates,” said the Rev Musyimi. “We also need justification for continued financial support to parastatals and additional transfers to other levels of government.”

Other concerns raised by the Budget Committee included justification for some new projects such as the proposed plan to light up Nairobi County and how well ministries have adopted the Integrated Financial Management Information System.

The committee also demanded a meeting with the President to comprehensively address the fate of the almost 200,000 pupils who missed Form One places this year.

“We recommended that Sh1.5 billion be set aside to build polytechnics to cater for these pupils but that has not been done,” the Rev Musyimi said.

“This has contributed to the problem of uneducated and unemployed youth who are part of the insecurity problem that the country is now facing.”