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House team pokes at Uhuru's budget statement

By | April 5th 2011

By Peter Opiyo

The Parliamentary Budget Committee has criticised the Budget Policy Statement (BPS) presented to Parliament by Finance Minister Uhuru Kenyatta last month.

The committee noted that the BPS did not put into consideration the economic hardships the country is experiencing, pointing out adequate austerity measures were not put in place to reignite the battered economy.

Consequently, the Elias Mbau-led committee wants the Government to cut down spending on recurrent expenditure to curb the runaway inflation and cut down the ballooning public debt.

Mr Mbau pointed out the BPS came out at a time of increased unemployment, runaway inflation and eminent drought, thereby calling for watertight fiscal management policies, which he said were not observed by the Treasury in the statement.

"Hard times require difficult solutions to be found. For this reason, one major choice the Government will need to consider is to contract public spending in order to curb rising inflation. No one can curb inflation with increase in recurrent expenditure," said Mbau.

In the BPS, which gives a forecast of Government revenue and expenditure ahead of the reading of the budget in June, the Treasury puts recurrent expenditure for 2011/2012 at about Sh644 billion, while development expenditure would be Sh331 billion.

Sustainable levels

The committee expressed concerns at the amount of public debt, which runs at 50 per cent of the Gross Domestic Product (GDP), above the sustainable 42 per cent. GDP is the income generated within the country.

"There is need to contain the ballooning public debt to sustainable levels as required. For the public debt to go down there is urgent need to either raise additional resources or reduce expenditure," said Mbau, who is also the Maragua MP.

Further, the committee said it would recommend exploitation of the export market to open up the economy, when it embarks on the review of the BPS. Mbau said the committee has realised that the country is dependent on ‘one-engine’ (domestic) economy.

Vice-Chairman of the committee and Webuye MP Alfred Sambu said the team is also getting ready to scrutinise the budgets of the Judiciary, Parliament and the Executive, which are expected to be presented to Parliament by April 30, as required by the Constitution.

Committee members Moses Lessonet (Eldama Ravine), Jackson Kiptanui (Keiyo South) and Julius Kones (Konoin) accompanied them.

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