LAKIN: Better public debate on figures needed - Daily Nation

Better public debate on figures needed

Saturday June 14 2014

Former Kinangop MP Mary Wanjiru among other Kenyans waits outside Parliament Buildings in Nairobi yesterday when Finance Cabinet Secretary Henry Rotich presented the Budget. PHOTO/  EVANS HABIL

Former Kinangop MP Mary Wanjiru among other Kenyans waits outside Parliament Buildings in Nairobi yesterday when Finance Cabinet Secretary Henry Rotich presented the Budget. PHOTO/ EVANS HABIL 

The Constitution now requires that budget-making involves conversation among the Executive, Parliament and the public.

The discussion begins in earnest in December with proposals for the revenue split between the national and county governments and ends in June with national and county budgets.

How should we assess the quality of this parley vis-à-vis  the 2014/2015 budget?

We can start by understanding what the conversation is meant to be about at three distinct moments.

From December to February, the discussion should focus on revenue-sharing between the two levels of government. In February and March, the talks should mostly be about relative priorities at sector level. More for health or agriculture?

SERIOUS CONVERSATION

From April to June, the conversation is mostly about how to spend money within sectors. More for dispensaries or health workers?

How have we done at each stage of the conversation?

The first stage has seriously been delayed. In fact, Parliament is debating the national budget but has not published a final Division of Revenue Act, which was due by March 15, clarifying how much money has been allocated to the national or county governments.

This completely undermines the discussion since priorities should be based on a fixed fund that is then divided up. How do we debate shares without knowing the size of the pot?

This is not a trivial matter because the Senate version of the Division of Revenue Bill (from May 15) requires the national government to allocate an extra Sh10 billion to regional hospitals, money which was not included in the budget tabled in April. From where?

The second stage is the setting of the sector ceilings, which should be known by March. The Budget Policy Statement 2014 proposed total ministerial spending of Sh1.11 trillion. Of this, Sh652 billion was for recurrent expenditure and Sh459 billion for development spending.

Parliament decided to increase the size of the ministerial budget slightly to Sh1.14 trillion, with Sh652 billion for recurrent expenditure and Sh488 billion for development spending.

The final budget proposal is Sh1.13 trillion (Sh654 billion recurrent, Sh476 billion development). This suggests that the Treasury responded to Parliament’s desire for a larger, more development-heavy budget.

However, given that government consistently underspends its development budget (less than 50 per cent of the one approved in 2012/2013), we need a better public conversation about why we are increasing a budget that never gets spent.

There are also considerable differences between what Parliament approved and what the Executive offered at ministry level. 

POOR QUALITY DIALOGUE

For example, Parliament approved a ceiling of Sh38 billion for the Ministry of Health, as proposed by government itself in the Budget Policy Statement.

The proposed budget now has over Sh47 billion for the ministry. If the Executive and Parliament agreed in March on a ceiling for health, it is a sign of poor quality dialogue when government suddenly changes the figure in April without explanation.

What of the third stage? The third stage starts on April 30 with the tabling of the budget.

Unfortunately, media pays little attention to the discussions between Parliament and the public in May that form the core of this stage, while focusing heavily on the June budget speech.

The budget speech may reveal new information about revenues, but the public conversation on expenditure is largely over by June.

By the time the Cabinet Secretary reads the budget, there should have been detailed interrogation of the allocations.

This type of interrogation would lead to questions such as why the free maternity programme is receiving less in real terms than last year.

All in all, the conversation needs to be improved.

Dr Lakin is the Director of the International Budget Partnership Kenya.

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