Winners and losers in the new budget

The Infrastructure ministry is one of the biggest winners in the amended budget for the current financial year.

This is after the National Treasury added the ministry an extra Sh44.1 billion in a budget majority of other ministries including Health, Water and Sanitation alongside the Judiciary and the National Assembly has seen significant cuts in their budgets.

The previous budget for the State Department for Infrastructure was Sh193.8 billion, comprising Sh61.3 billion and Sh132.5 billion for current and capital expenditure respectively.

The new estimates increased this to 237.9 billion. This consists of Sh61.2 billion and Sh176.6 billion for current and capital expenditure respectively.

"This reflects an increase of Sh 44.1 billion. The decrease in current expenditure is on account of reduction in compensation to employees to reflect the actual trends, while the increase in capital expenditure is mainly on account of budget rationalisation and payment of outstanding pending bills," the document reads.

This reinforces the Jubilee government's obsession for big infrastructure spending even when the country is faced with a life and death battle in the wake of the Covid-19 pandemic.

FISCAL RISKS

Treasury Cabinet Secretary Ukur Yatani said in his brief to parliament that his second supplementary budget seeks to address coronavirus-related expenditures, provisions to mitigate against the effects of floods, pending bills, tax refunds, salary shortfall and job evaluation arrears.

Mr Yatani said the new supplementary budget would also scale down on expenditure to achieve the targeted fiscal deficit level. This is the second supplementary budget in the current fiscal year.

“To manage fiscal risks prudently, the government has improved its macroeconomic forecasts and regularly reviews the impact of macroeconomic projections and their implications on the budget," Yatani said in his statement to parliament.

"Over the medium term, the national government's borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure," Mr Yatani added.

The other big winners of the new budget include the State Department for Crop Development, which got an additional Sh12.7 billion on its previous budgets, the State Department of Correctional Services got an extra Sh6 billion, while the State Department for University Education got an additional Sh5.4billion.

The boost to the State Department for Crop Development will help combat infestation and spread of desert locusts and the strategic food reserve.

Treasury says the previous budget for the department is Sh22.51 billion, comprising Sh4.17 billion for current expenditure and Sh18.34 billion for capital expenditure.

JOB EVALUATION

But this has now been adjusted to Sh35.25 billion. In the new budget, the recurrent expenditure will now be Sh14.64 billion and capital expenditure is Sh20.61 billion.

"The overall change reflects an increase of Sh12.74 billion consisting of additional Sh10.47 billion in the current expenditure and additional Sh2.27 billion in the capital expenditure," the supplementary budget notes.

The additional Sh10.47 billion in the current expenditure is on account of job evaluation for staff of Bukura Agricultural College, additional funds for combating infestation and spread of desert locusts and additional funds for the Strategic Food Reserve.

The additional Sh2.27 billion in the capital expenditure is on account of additional donor funds for implementation of Kenya Climate Smart Agriculture Project and National Agricultural and Rural Inclusive Project, and rationalisation of expenditure.

"The affected programmes include General Administration Planning and Support Services, Crop Development and Management, and Agribusiness and Information Management," the document adds.

Other beneficiaries are the Presidency, whose budget was increased by Sh4 billion, the budget for the State Department for Youth was increased by Sh5 billion, the National Intelligence Service got an additional Sh3.5 billion, while the Teachers Service Commission (TSC) got an additional Sh2.8 billion to spend in the next two months.

GROWTH AFFECTED

Some of the losers in the new budget include the Energy ministry, which saw its budget reduced by Sh21.5 billion, Transport department was slashed by Sh21 billion, Health ministry lost Sh12.2billion, the ICT ministry budget was cut by Sh7.8 billion, while the Water and Sanitation got its budget shaved by Sh7.3 billion.

The Water and Sanitation alongside the Health ministries need the most funding at this time. The Interior ministry had its budget reduced by Sh6.9 billion while the State Department for Housing and Urban Development had its budget cut by Sh5.5 billion.

The National Assembly took a Sh2.5 billion hit in the new budget. This is after the new estimates were revised to Sh21.3 billion.

At the end of the amendments, the Treasury reduced the national budget by Sh74.3 billion. This is after the total budget reduced from Sh2 trillion to Sh1.93 trillion.

But the biggest casualty will be the development expenditure, which will take a hit of Sh98.7 billion.

This comes at a time when the government is faced with a serious cash flow problem due to low tax collections by the taxman.

Treasury data shows that tax collections by March 2020 had a shortfall of Sh211.9 billion. This is after the government raised Sh1.32 trillion in revenues and appropriations in aid against a target of Sh1.53 trillion.

Mr Yatani notes that the overall change in the national government ministerial budget, excluding consolidated fund services and county allocations from the original approved budget, is an increase of Sh3.8 billion. "This is within the provisions of Article 223 of the constitution," he says.