Treasury seeks to cut Ksh.99 billion from 2019/20 budget


Treasury seeks to cut Ksh.99 billion from 2019/20 budget
File Treasury Cabinet Secretary Ukur Yatani. PHOTO| COURTESY

In Summary

  • The proposals accommodated in Supplementary Estimates No.2 2019/2020 seek to trim spending by the National Government by Ksh.74.4 billion while revising down payments on pension and interest on debt by a further Ksh.24.8 billion.
  • The Ministry of Health is surprisingly on the end of cuts to its expenditure against its unprecedented battle with the Covid-19 pandemic as Treasury proposes cuts amounting to Ksh.12.2 billion to its budget.
  • The ammendments to the fiscal spend have been pinned on projected revenue shortfalls in the government’s calendar year as Treasury seeks to narrow the government’s fiscal deficit to 6.3 percent from an expanded hole of 7.7 percent in the previous financial year.

The National Treasury has proposed trimming spending by Ksh.99.2 billion from the current budget in proposals submitted to the National Assembly on Tuesday.

The proposals accommodated in Supplementary Estimates No.2 2019/2020 seek to trim spending by the National Government by Ksh.74.4 billion while revising down payments on pension and interest on debt by a further Ksh.24.8 billion.

Allocations to both the National Assembly and the Judiciary are set to come down with Treasury proposals instilling cuts of Ksh.2.5 billion and Ksh.1.7 billion to leave their respective budgets at Ksh.17 billion and Ksh.21.3 billion.

The Ministry of Health is surprisingly on the end of cuts to its expenditure against its unprecedented battle with the Covid-19 pandemic as Treasury proposes cuts amounting to Ksh.12.2 billion to its budget.

“The decrease in capital expenditure is mainly due to rationalization of the budget. To address the COVID-19 disease, the Ministry has been funded with Ksh.3.9 billion, which comprises of Ksh.1 billion for recruitment of health workers, Ksh.300 million for operations and Ksh. 2.6 billion under development,” notes the Treasury document.

Other big losers in the executive include the National Treasury which has backed cuts amounting to Ksh.35.6 billion to its own budget and the Ministry of Energy which is set to see a Ksh.21.5 billion correction in its spending to Ksh.62.5 billion.

Winners in the executive pool include the State Departments of Transport and Infrastructure which are set to see respective increases of Ksh.21.1 billion and Ksh.44.1 billion.

The Consolidated Fund Services (CFS) are expected to witness a significant shift in composition with Treasury proposing a reduction of Ksh.7.8 billion on interest payments to Ksh.433.7 billion from, Ksh.441.5 billion.

Payments on pensions, salaries and allowances are meanwhile tipped to decline to Ksh.91.6 billion from Ksh.109.2 billion.

Redemptions on principal amounts which do not feature as part of the total budget are however set to jump to Ksh.778.8 billion from Ksh.696.6 billion.

Total spending for the financial year to June is now set to narrow to Ksh.2.7 trillion from Ksh.2.9 trillion subject to potential ammendments to spending by Counties.

The ammendments to the fiscal spend have been pinned on projected revenue shortfalls in the government’s calendar year as Treasury seeks to narrow the government’s fiscal deficit to 6.3 percent from an expanded hole of 7.7 percent in the previous financial year.

The deviation on total revenues in six months to December 31 stood at Ksh.128..9 billion as collections by the Kenya Revenue Authority (KRA) fell shy off the mark by Ksh.88.4 billion while appropriations in aid (A-i-A) were Ksh.40.5 billion off the trail.

The proposals by the National Treasury are expected to be part of the amendments discussed in the National Assembly when the house resumes its sittings on Wednesday.

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Story By Kepha Muiruri
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