Pitfalls likely to hinder smooth 2016/2017 budget implementation
Counties
By
Dominic Omondi
| Jun 09, 2016
The 2016-17 Budget comes against the backdrop of an electioneering period. It is expected Jubilee will spend more in a bid to win voters.
There are pitfalls which, if not dealt with, could threaten the smooth implementation of the Sh2.3 trillion budget:
1. Goodies to the electorate
Sh2.3 trillion might not just be enough. The pressure to give goodies from the national government to many regions will push up spending.
And President Uhuru Kenyatta, eager to extend his stay in the house on the hill, might fall to these whims.
READ MORE
Zanzibar launches $12 million heritage restoration drive with private partner
When fundamentals are stable but the patient is terrified
Beyond the cloud: How US firm has built muscle in the digital world
Zani defends NADCO committee ahead of March 7 deadline
Bishop questions Sh11.9 trillion public debt as hardship bites
Kenya's Sh515 million open defecation crisis
Towers: The new kings of Nairobi's skyline
Educational institutions boost investors' appetite in Murang'a
Family cries foul over delays in postmortem of their slain kin
Wetang'ula pushes for stronger Kenya - Egypt parliamentary diplomacy
2. KRA fails to meet Sh1.36 trillion collection target
If history is a mirror of the future, then KRA is more likely than not to miss its Sh1.36 trillion collection target, thus rocking the Government's budgetary boat.
Already, there are indications that the taxman is set to miss its target, having collected Sh687 billion with just four months to go.
3. Heavy commercial borrowing
Kenya's total public debt as of December last year stood at Sh3.16 trillion.
Most of this debt has been from concessional multilateral lenders such as the World Bank and African Development Bank (AFDB) and bilateral ones from countries like China.
4. Failure by donors to come through
In the Controller of Budget's half-year report, donor releases were Sh85 billion (24.3 per cent) out of Sh349 billion that was expected from partners to finance development projects.
The Budget Controller blamed the low out-turn of donor funds to non-fulfilment of donor requirements and delays in procurement by the ministries in implementing projects.
5. Low uptake of funds for development projects
Perhaps this is the most worrying pitfall. Ministries, departments and agencies are not putting most of their development allocation into use.
Between July and December 2015, the ministries were able to absorb only 23 per cent of their allocated funds.
Even as the national government prides itself on having allocated 38 per cent of total expenditure on development, way above the 30 per cent requirement, absorption of these funds remains an elephant in the room.