Treasury trims budget as projected revenues dip

By James Anyanzwa

The Government has revised downwards its total spending for the financial year 2013/2014.

 The reduction comes amid mounting concerns over shrinking revenue collections and growing public debt that hit Sh1.78 trillion by December last year.

According to the Budgetary Estimates tabled in Parliament by the Leader of the Majority Party Mr Aden Duale, yesterday, the National Treasury slashed its proposed budget by a massive Sh500 billion.

Treasury had projected this year’s budget to climb to Sh1.5 trillion to finance   expanded State operations brought about by the devolved system of government.  The figure has been trimmed down to Sh1 trillion with Sh442.74 billion and Sh568.33 billion reserved for development and recurrent expenditures respectively.

The greatest headache, however, will be coming up with a budget that entrenches devolution while and at the same time helps to spur economic growth. The 2013/2014 budget had been expected to be the most complicated and expensive to finance as Kenya started implementing a devolved system of government.

 There will be 47 administrative centres at each of the 47 counties. It is estimated that the infrastructure costs for the administrative headquarters will cost the taxpayer over Sh30 billion in the first year.

Last year, the then Finance minister Njeru Githae unveiled a Sh1.45 trillion budget of which Sh1 trillion (69 per cent) went to recurrent spending while Sh451.7 billion (31 per cent) was channelled towards development programmes.

Expenditure priorities

However, this year’s budgetary allocations was expected to be in line with the expenditure priorities. It was to adhere to the Constitution; distributing functions between the two levels of government and Vision 2030.

In this year’s budget, the State will have to deal with the issues of rapid population growth and insecurity.

The Parliamentary Budget Office has pinpointed the four issues as those that are likely to have a “downside risk” to the national economy if left unattended.

The other goodies promised by Jubilee include free secondary education, free maternity services, laptops for school going children, school milk programme, and subsidy of fertilisers for farmers, and interest-free grants to enterprising youth.

Technocrats at the Treasury will be facing a daunting task of financing the implementation of the ambitious programmes pledged by President Uhuru and his deputy William Ruto.

The Jubilee Coalition had crafted an agenda anchored on job creation, food security, health-care, education, youth and women empowerment, and improved security.

According to Treasury’s Budget Review and Outlook Paper (Brop) for the financial year 2013/14-2015/2016, unemployment would have to fall significantly for any meaningful reduction in poverty.

“Current growth projection of 6.2 per cent for 2012-2015 will only create 560,000 jobs annually,” it says.

“This is not enough to address unemployment problem and reduce poverty.”