House team slashes ministry allocations to control spending

By James Anyanzwa

Nairobi, Kenya: The parliamentary Budget and Appropriations Committee has recommended major cuts in budgetary allocations to various ministries and Government agencies with a view to freeing resources for priority areas.

The total Budget for the 2013/2014 financial year stands at Sh1.64 trillion, with development and recurrent spending taking 43 per cent and 57 per cent of the total Budget, respectively.

Some of the projects earmarked for additional funding include Konza City project (Sh2 billion), forensic laboratory and crime research centre and CCTVs (1.2 billion), communication equipment (Sh4 billion), traffic reforms (Sh200 million) and establishment of modern laboratory services by the National Environment Management Authority (Sh500 million).

Austerity measures

The committee has drastically trimmed down the National Treasury’s budget by Sh9.91 billion and recommended an immediate winding up of the Poverty Eradication Commission (PEC) as part of austerity measures to control public spending.

The 51-member committee has also recommended the slashing of the Parliamentary Service Commission (PSC) budget by Sh5.5 billion (from Sh24.5 billion to Sh19 billion). It also directed that the threshold for the Judiciary be limited to Sh16.1 billion, which is Sh1 billion above the ceiling given to the institution, to be used to construct courts in counties.

The revision comes amid rising concerns over the outrageous budgetary proposals presented by various government ministries, departments and commissions, even as the modalities of financing a historic Sh1.64 trillion Budget remain a nightmare.

The Budget committee, which expects its fresh measures to save Sh15.38 billion in expenditure cuts, also rejected the Judiciary’s request for Sh300 million to purchase an aircraft.

It also recommended allocations to all other commissions to be reduced by 15 per cent to create savings amounting to Sh1.3 billion.

The committee, headed by Mbeere South MP Mutava Musyimi, reduced the recurrent budget for all transfers to semi-autonomous Government agencies (SAGAs) by Sh3.7 billion, or five per cent.

The reduction, however, excludes SAGAs in the ministries of Education, Science and Technology, Health, Transport and Infrastructure, Environment, Water and Natural Resources, Energy and Petroleum, Agriculture, Livestock and Fisheries, Industrialisation and Enterprise Development and Mining.

The exclusion also includes the Kenya Revenue Authority, National Museums of Kenya, Office of the Auditor-General and constitutional commissions such as PSC and the Judiciary.

In addition, the committee has instructed the National Treasury to cut spending on hospitality supplies, foreign travel, printing and advertising across all Government agencies by Sh1.3 billion (30 per cent).

“Hard times call for difficult choices. The Government must reduce its appetite and contain the public spending. We are mortgaging future generations through the build up of a debt which we are incurring to meet recurrent expenditures,” said Musyimi. “Approving the estimates as submitted would be perpetuating the burden we are heaping on our children.”

Winding up

The committee, whose report was tabled before Parliament yesterday, reduced the Budget for PEC by Sh170 million and ordered the Devolution and Planning Cabinet Secretary to explore modalities of winding it up within the 2013/14 financial year. The committee noted that the poverty eradication body has ceased performing its intended purpose.

It recommended additional allocations for the ministries of East Africa Affairs, Commerce and Tourism (Sh3 billion), Industrialisation and Enterprise Development (Sh3 billion), Devolution and Planning (Sh1.3 billion) and Director of Public Prosecutions (Sh300 million).

It also wants the Agricultural Finance Corporation revamped to provide farmers with affordable loans and recommended an additional Sh1 billion to revamp the Kenya National Spatial Data Infrastructure (Geomapping) under the Ministry of Lands, Housing and Urban Development.

Government agencies and commissions under the National Treasury that have been starved of cash include the Public Procurement Oversight Authority (PPOA), whose budget has been cut by Sh19 million. The amounts allocated to human resource reforms and the Financial Reporting Centre (FRC) have been reduced to Sh1.5 billion and Sh350 million, respectively.

Reduced to zero

The allocation for establishing an expert/service scheme has been scaled down to Sh200 million, while allocations to constitutional reforms, irrigation projects to schools, construction of green houses in schools, irrigation infrastructure and the Privatisation Commission have been reduced to zero.

The committee also reallocated funds from areas with a low absorption of funds to high priority areas.

The committee raised concerns that the country has focused more on increasing Government spending than creating a surplus and allowing private sector-led economic growth.

The 2013/14 Budget marks a milestone in the public finance architecture as it fully ushers in the devolved form of Government envisaged under the Constitution.

Unlike in the past, resources are now being shared between the national government and 47 county governments.

“We must accept that Kenyans have  a lot of expectations. However as we all know, the administrative structures created by the Constitution are many and expensive. This calls for serious reflection,” said Musyimi. “It is therefore demanded of us to soberly discuss how to reduce some of the huge expenditures of these institutions without negatively impacting on their services.”