House team adopts Sh64.1b supplementary budget

What you need to know:

  • The Ministry of Agriculture will receive Sh3.7 billion to acquire strategic stock to address the crippling food shortages.
  • A further Sh74.6 million has been made from the recurrent budget of the National Treasury’s general administration programme towards settling outstanding obligations for Webuye’s Rai Paper, formerly Pan Paper Mills.
  • The Consolidated Fund Services will increase by Sh15.5 billion, including an increase in domestic interest debt service by Sh10.5 billion and an increase in pensions by Sh5 billion.

A House committee has adopted a Treasury proposal for an extra Sh64.1 billion in the supplementary budget to finance election-related security operations and food shortages, just three weeks before the end of this financial year.

The estimates, tabled in the House on Tuesday, comprise an increase of Sh6.5 billion in recurrent expenditures and Sh42.1 billion in development expenditure, bringing the total 2016/17 budget to a gross of Sh1.7 trillion

The Ministry of Agriculture will receive Sh3.7 billion to acquire strategic stock to address the crippling food shortages.

The Ministry of Interior will receive Sh3.2 billion for election security-related operations, including enhanced security operations in preparation for the August general election and recruitment, training, kitting and feeding the recruits and facilitation of peace forums in all the 47 counties.

The Ministry of Health will receive Sh1.5 billion in the recurrent expenditure to cater for salaries for medical practitioners under the various collective bargaining agreements (CBAs).

RAI PAPER

The key increases in development expenditure are Sh19.6 billion (Ministry of Energy), Sh8.3 billion (ministry of Water), Sh7 billion (Ministry of Infrastructure), Sh2.4 billion (vocational and technical training), Sh2 billion (Ministry of Education) and Sh1.2 billion (Ministry of ICT)

A further Sh74.6 million has been made from the recurrent budget of the National Treasury’s general administration programme towards settling outstanding obligations for Webuye’s Rai Paper, formerly Pan Paper Mills.

Another Sh9 million has been made within the recurrent budget of the State Department for Arts and Culture under the Culture Programme for youth activities.

A reallocation of Sh343 million has been made within the development budget of the Ministry of Health to the Burns Unit at Kenyatta National Hospital.

Another Sh40 million has been reallocated from the development budget of the Ministry of Interior to the Office of Deputy Inspector-General, Kenya Police Service, for enhanced security operations.

INCREASED BORROWING

The Consolidated Fund Services will increase by Sh15.5 billion, including an increase in domestic interest debt service by Sh10.5 billion and an increase in pensions by Sh5 billion.

The increase to the allocation for servicing public debt is a result of higher borrowing in the financial year and the reopening of existing long-term bonds while the increase in pensions is a result of a rise in the allocations for payment of retired teachers’ pensions.

However, the Budget and Appropriation committee has complained that even as it reviewed the estimates, it did not have performance information relating to the projects.

“It therefore means we will be approving additional spending based on scanty information submitted during the review of the proposals,” the committee states in its report.

However, the committee is unhappy with the reduction of Sh3.1 billion in the allocation for compensation to employees under the Teachers Service Commission (TSC), saying that will result in hiring fewer teachers than had been proposed at the beginning of the financial year.

FOREIGN TRAVEL

An additional Sh555 million has been earmarked for foreign travel and hospitality supplies against the Treasury directive that austerity measures be applied to such an item.

A review of performance of the exchequer receipts as of the end of April indicates that the government is likely to have a shortfall in revenue and also have a low absorption in development expenditure, especially externally funded projects.

The committee has therefore recommended that, going forward, the supplementary budget should only incorporate unforeseen and unavoidable expenditures to the extent only described by the relevant laws to enhance the credibility of the budget process.