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Lewis Njoka @LewisNJoka

President Uhuru Kenyatta has assented to the Supplementary Appropriation Bill, 2021 sinking the country into an additional Sh125 billion debt on the back of virus inflicted economic shocks.

The newly signed law gives authority for issuance of Sh125.68 billion from the Consolidated Fund  towards specific uses for the year ending June 30, 2021.

It will lead to a 4.3 per cent increase on the approved budget for the Financial Year (FY) 2020/21.

Additional expenditure

Additional expenditure was however approved despite a projected dip in revenues where FY2020/21 revenues are estimated at Sh1.85 trillion down from the Sh1.89 trillion projected earlier.

Given the expected revenue underperformance, the Sh125 billion increase in fiscal deficit will mostly be funded by commercial borrowing where Sh46 billion will be borrowed locally and Sh80 billion raised externally through sovereign bond.

“The Supplementary Budget was necessitated by post Covid-19 related interventions,

payment of pending bills, salary adjustments, changes in development partners funded projects, rationalisation of the budget among other national urgent needs,” read a Parliamentary brief sent to the President.

Development budget will benefit the most increased by Sh59.81 billion, recurrent spending by Sh20.22 billion while Consolidated Fund Services will be increased by Sh45.65 billion.

Parliament said increasing the development budget will enable the government to continue investment in the critical sectors of infrastructure, healthcare, and housing, while supporting the most vulnerable.

Consequently, this will help create jobs in line with the governments’ post Covid-19 Economic Recovery Strategy.

Under the development budget rail transport programme received Sh36.11 billion, Treasury’s public financial management programme Sh23.87 billion, while the ministry of health received an additional Sh10.08 billion. The Bill was passed by the National Assembly on March 23 2021.