Rotich’s balancing act to finance Ksh3.07tr budget
It’s D day for Treasury cabinet Secretary Henry Rotich as he presents the country’s Sh3.07 trillion budget, the largest in Kenya’s history.
The Treasury boss will be walking a tight rope as he strives to ensure he comes up with the funds to actually finance the 2018/19 budget.
Already the number point to a large deficit with little room to balance between recurrent and development spend.
In light of the pressing need for expenditure to meet huge infrastructural projects by government, the Kenya Revenue Authority (KRA) Sh1.7 trillion targets barely scratch the surface in regards to government fiscal needs.
KRA has on an annual basis improved its revenue collection, but always fallen short of meeting the targets set by the Treasury.
To offset this, Mr Rotich will be pensively waiting to raise an additional Sh179 billion from government fees and collections from parastatals and ministries.
Budget estimates tabled in Parliament show that the Treasury will also be banking on Sh47.1 billion in form of grants from foreign governments and development institutions.
Parliamentary Budget and Appropriations Committee chairman Kimani Ichung’wa in his report to Parliament noted that the projected financing is still inadequate to meet the budget, leaving a Sh562.7 billion hole, to be plugged through domestic and international borrowing.
“Given that these resources are inadequate to finance the projected expenditure and net lending amounting to Sh2.5 trillion, then the government will need to finance the Sh562.7 billion fiscal deficit through borrowing,” Mr Ichung’wa said.
The government has set an ambitious development plan under the Big 4 banner, which will leave treasury mandarins with sleepless nights on how to generate cash to fund the same.
The national government has been allocated Sh1.67 trillion of which Sh890 billion will be gobbled up through salaries leaving less than half of the funds to channel to development
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