13 June 2019

Kenya: Cabinet Okays Budget Estimates Ahead of Presentation in Parliament

Nairobi — The Cabinet has endorsed Budget Estimates for the 2019/20 financial year due for presentation in the National Assembly Thursday afternoon.

The spending plan was approved during a Cabinet meeting chaired by President Uhuru Kenyatta at State House, Nairobi during which National Treasury Cabinet Secretary Henry Rotich outlined the government's expenditure plan.

Rotich departed his office on Harambee Avenue at 3.32pm on Thursday carrying the ceremonial budget briefcase as he made his way to the National Assembly to outline government spending in the 2019/20 financial year beginning July 1.

The Sh3.02 trillion spending plan is set to lower the budget deficit to 5.6 per cent of the Gross Domestic Product (GDP), a 0.7 per cent reduction compared to a 6.3 per cent deficit in the Sh3.07bn 2018/19 budget.

The new target is in line with the National Treasury's medium term plan to reduce budget deficit to be 3 per cent of the GDP by the financial year 2020/23.

The 2019/20 budget estimates set national government expenditure ceiling at Sh1.8 trillion with Parliament budget capped at Sh43.8 billion.

County governments and the Judiciary are set to receive an estimated Sh372.6 billion and Sh18.9 billion respectively.

Sh5.8 billion is to be set aside for the Equalization Fund.

In nominal terms, the 2019/20 budget as share of GDP is projected to reduce to 28 per cent compared to 32.4 per cent in the current fiscal year.

The taxman is projected to raise Sh2.1 trillion in revenue under the 2019/20 financial year after revenue projections were revised upwards by Sh35 billion.

President Uhuru Kenyatta's Big Four priority projects of affordable housing, food security, universal healthcare and enhanced manufacturing will cost in excess of Sh 450 billion representing 14.6 per cent of the 2019/20 budget.

Estimates indicate Sh374.1 billion will be channeled towards the implementation of the development priorities while Sh76.1 billion will be injected to the drivers of the development agenda.

The indicative budget for agriculture and livestock for Medium Term Plan III is estimated at Sh55.77 billion, manufacturing at Sh125.4 billion, health Sh 82.8 billion, housing Sh103.2 billion.

The presentation of the budget came amid a push and pull over the delayed passage and adoption of the Division Revenue Bill which is sets out a formula for allocation of resources to the national and county governments.

National Assembly Majority Leader Aden Duale said he would persuade the Speaker to allow the publication of the Bill to mitigate a budget crisis in counties.

Pending the enactment of the Bill, devolved units will relay on overdrafts administratively extended to them by the National Treasury.

The contention has put the Senators at loggerheads with members of the National Assembly, the former accusing the latter of sabotaging counties.

Four non-government organizations unsuccessfully attempted to stop the reading of the budget after a High Court in Nairobi declined to entertain their application.

Justice James Makau declined to convene after Kenya Human Rights Commission (KHRC) alongside Transparency International (TI), Africa Center for Open Governance (AfriCOG) and The Institute for Social Accountability (TISA) moved to his court seeking orders to stop the presentation of the budget over the Parliament's failure to pass the Division of Revenue Bill as required by law.

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