National Treasury CS Rotich asks MPs for Sh198b days before closure of fiscal year

Treasury Cabinet Secretary Henry Rotich has asked MPs to approve a fresh top up of the current Budget by an extra Sh198.3 billion.

In a report by the Budget and Appropriations Committee tabled in the House late yesterday, the National Treasury seeks the money to pay for the Standard Gauge Railway project, bail out Kenya Airways and boost geothermal power generation.

A day after MPs from western Kenya visited President Uhuru Kenyatta seeking money to bail out Mumias Sugar Company, the Budget Committee said that the rights issue for Mumias Sugar will have to be put on ice until the next financial year. This means the deal at State House was just politics, at least for now. Treasury had budgeted Sh2 billion for the rights issue.

Kenya Airways, the national carrier that has been struggling in the face of the Ebola scare in its main market in West Africa, also got Sh4.2 billion in what the National Treasury called “the emergency shareholder loan”.

Increase borrowing

The bulk of the money is in re-allocations of the budget, but the overall impact on the 2014-15 Budget is that it rises from Sh1.232 billion to Sh1.426 billion. This is the second supplementary budget that the House is set to approve this month, because the first one approved was of Sh50 billion.

The MPs are concerned about how these extra allocations in the budget will be funded.

“It raises concerns of whether revenues are expected to over-perform in the last few months of the year or if the Government intends to increase borrowing,” said the Budget Committee in its report to the House.

Despite the overall expenditure increment, the second supplementary budget has not provided information on how these expenditures will be funded.

The Cabinet secretary has also sought Sh8 billion to pay for the fertiliser subsidy that the Government gave farmers at the beginning of the planting season, and part of the money will buy the maize as soon as the farmers harvest their crop. The National Irrigation Board will also get part of the money.

The money for the railway and for the upgrade of the country’s airports, according to the second supplementary budget is Sh138 billion. The troubled National Youth Service will get Sh4.9 billion. The country’s spy agency, the National Intelligence Service, was given Sh1.7 billion and State House got Sh1.98 billion. The Ministry of Interior also got Sh9.2 billion to beef up security.