Treasury unveils Sh1.6trn budget

PHOTO | FILE Kenyans file their annual tax returns at Times Tower, the KRA headquarters in Nairobi. The Jubilee government on May 2 released budgetary estimates for the next financial year.  NATION MEDIA GROUP

By WACHIRA KANG’ARU wkangaru@ke.nationmedia.com
Posted  Thursday, May 2  2013 at  23:30

The government on Thursday unveiled a Sh1.6 trillion expenditure projection as it lay ground to fulfil promises made during campaigns.

In budget estimates tabled on Thursday by the parliamentary Majority Leader, the national government has budgeted for Sh1 trillion with 43 per cent going to development expenditure.

On Tuesday, the government tabled the Division of Revenue Bill 2013 setting Sh198.7 billion as allocation to county governments.

And in line with the new law, the Parliamentary Service Commission submitted a budgetary estimate of Sh24 billion while the Judiciary has budgeted for Sh22 billion. An additional Sh380 billion will go to the consolidated fund, money that goes to pay pension and repay public debt.

This brings the total government expenditure to Sh1.62 trillion, an 11 per cent increase from last year’s budget. Last year, Finance minister Robinson Njeru Githae presented a Sh1.46 trillion budget which was a 22 per cent increase from the Sh1.2 trillion presented in 2011.

The estimates show that the Treasury has worked to factor in funding of Jubilee government campaign promises with key ministries getting the lion’s share.

Among the key pledges were a free solar laptop to every child joining public school next year, free maternity services, free milk programme which President Kenyatta committed to fulfil in the first 100 days.

The Teachers Service Commission retained the giant share, getting Sh143 billion, followed by the Ministry of Education, Science and Technology at Sh130 billion.

The Ministry of Transport and Infrastructure is to receive Sh125 billion with most of the fund — Sh102 billion — going to development.

The Ministry of Interior and Coordination of National Government takes the fourth position with Sh108 billion allocation and Devolution and Planning Sh84 billion.

In managing debt, the government has set a limit of Sh114 billion borrowing from the domestic market.

As at the end of March 2013, public debt stood at Sh1.8 trillion or 46.56 per cent of GDP with most of it — 55 per cent being domestic. There is a growing fear that the growth in domestic debt will crowd out private sector borrowing, denying the productive sectors of economy money for expansion.

The slowdown in the 2012 growth is largely attributed to the high interest rates which saw priced credit out of reach for many.

The budget estimates are to be forwarded to the yet to be constituted parliamentary budget committee for review. The budget committee will then prepare a report to be tabled in Parliament for discussion and approval. The report is to take in views from the public.

The scale-down of the county government allocation is expected to raise a storm with the Commission on Revenue Allocation (CRA) saying it will oppose the move.

“The Treasury’s figures have not changed from what it proposed last year. We will go to the Parliamentary Committee on Budget and Appropriation to defend our position. In fact the Senate wants the figure raised to Sh250 billion,” CRA chairman Micah Cheserem told our sister publication Business Daily on Wednesday.

The National Treasury however says CRA estimates that put the allocation at Sh231 billion fails to take into account the new salary scale set out by the Salaries and Remuneration Commission.