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Pitfalls likely to hinder smooth 2016/2017 budget implementation

By Dominic Omondi | Published Thu, June 9th 2016 at 09:27, Updated June 9th 2016 at 09:34 GMT +3
CS Henry Rotich reads the 2016/2017 burget in parliament on 8th June,2016.

The 2016-17 Budget comes against the backdrop of an electioneering period. It is expected Jubilee will spend more in a bid to win voters.

There are pitfalls which, if not dealt with, could threaten the smooth implementation of the Sh2.3 trillion budget:

1. Goodies to the electorate

Sh2.3 trillion might not just be enough. The pressure to give goodies from the national government to many regions will push up spending.

And President Uhuru Kenyatta, eager to extend his stay in the house on the hill, might fall to these whims.

2. KRA fails to meet Sh1.36 trillion collection target

If history is a mirror of the future, then KRA is more likely than not to miss its Sh1.36 trillion collection target, thus rocking the Government's budgetary boat.

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Already, there are indications that the taxman is set to miss its target, having collected Sh687 billion with just four months to go.

3. Heavy commercial borrowing

Kenya's total public debt as of December last year stood at Sh3.16 trillion.

Most of this debt has been from concessional multilateral lenders such as the World Bank and African Development Bank (AFDB) and bilateral ones from countries like China.

4. Failure by donors to come through

In the Controller of Budget's half-year report, donor releases were Sh85 billion (24.3 per cent) out of Sh349 billion that was expected from partners to finance development projects.

The Budget Controller blamed the low out-turn of donor funds to non-fulfilment of donor requirements and delays in procurement by the ministries in implementing projects.

5. Low uptake of funds for development projects

Perhaps this is the most worrying pitfall. Ministries, departments and agencies are not putting most of their development allocation into use.

Between July and December 2015, the ministries were able to absorb only 23 per cent of their allocated funds.

Even as the national government prides itself on having allocated 38 per cent of total expenditure on development, way above the 30 per cent requirement, absorption of these funds remains an elephant in the room.

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