First devolved budget estimates shoot through trillion mark


Acting Finance Minister Robinson Njeru Githae is likely to present to Parliament Sh1 trillion spending plan for the next financial year, the first under the devolved system of government.

According to preliminary estimates released by Treasury, the total budget for the fiscal year 2012/2013 is projected at Sh1.15 trillion, more or less the same level with the previous two budgets.

An estimated Sh364.8 billion and Sh782.7 billion would be reserved for development and recurrent expenditures.

budget deficit

According to Treasury’s Budget Review and Outlook Paper (Brop) for 2012, total revenues including appropriation-in-aid (AIA) is forecast to hit Sh922.6 billion with external grants at Sh47.2 billion.

The overall budget deficit (including grants) in 2012/2013 is projected to be about Sh177.7 billion.

Net external financing amounting to Sh100.1 billion is expected to cover part of this budget deficit, leaving about Sh77.6 billion to be financed through domestic borrowing.

But the Government will not factor in proceeds from the sale of State-owned corporations whose privatisation has been stalled by the delayed reappointment of some members of the privatisation board whose term expired more than a year ago.

The detailed and complete budget for the 2012/2013 fiscal year will be submitted to Parliament by end of April.

According to Brop, which was tabled by Justus Nyamunga, a director in-charge of Economic Affairs at the Treasury, the Government will continue borrowing from the domestic and external sources (on concessional terms) to finance budgetary deficit.

"Non-concessional financing will be accessed cautiously, used for productive investments, and limited to the set ceiling in the medium term debt strategy," said Nyamunga. The 2012 Brop is the first under the new Constitution and succeeds the annual Budget Outlook Papers (Bopa) that were produced under the old legal regime.

Mid-term expenditure

It provides an overview of the fiscal performance in the preceding financial year, implementation of the current budget and broad fiscal parametres for the 2012/2013 budget and the medium term.

The 2012 Brop covers the medium term expenditure framework period 2012-2013 to 2014/2015, which involves transition to a devolved system of government and implementation of the new Constitution.

The Brop sector ceilings incorporate the cost of delivering devolved functions under the new Constitution.

The Government is expected to keep budgetary expenditures consistent with medium term priorities and continue with rationalisation to improve efficiency and reduce wastage.