Winners and losers in National Treasury’s budget deficit

Preparing the budget for the next financial year must have been a haunting affair for the mandarins at the National Treasury, where they have had to deny additional funds to nearly all government agencies.

Right from the highest office in the land, across to the county governments, almost all entities that rely on the Exchequer will have to do with lower allocations.

This is as Kenya comes to terms with the effect of the coronavirus outbreak and its effects that has grounded the economy to a halt, substantially reducing the tax revenues that the government had expected to get this year.

Among those that will see the largest slash is the State Department of Transport, whose allocation is down Sh44 billion in 2020/21 to Sh49 billion from Sh99 billion in the current financial year. Others with major deductions are Treasury (Sh19 billion), Planning (Sh19 billion) and Housing and Urban Development (Sh17 billion).

The latter is critical to the  Big Four Agenda as it is in the driving seat of the affordable housing projects, and slashing its budget might mean putting the planned half a million housing units by 2022 in the back burner, at least for now.

Among the few entities that will see their budgets increase are the Health Ministry, considering it is at the heart of combating the Covid-19 pandemic. Even then, the Ministry has just been allocated an additional Sh21 billion, bringing to Sh114 billion its allocation for 2020/21 compared to Sh92.7 billion it had been allocated in 2019/20.

Other ministries that have seen their allocations grow include that of agriculture, whose State Department of Crop Development received an additional Sh17 billion. The Ministry of Tourism, which will have among the toughest jobs of wooing back tourists has received an additional Sh1 billion, bringing its allocation for the next financial year to Sh8.97 billion.

Others are teachers, whose employer the Teachers Service Commission (TSC) will get an additional Sh11 billion and the National Intelligence Service (NIS) that gets Sh1 billion.

In the budget documents, Treasury indicated that the country will struggle with fiscal consolidation in the short term as the taxman continues to record low revenue collections owing to the economic freeze caused by the Covid-19 pandemic.