Build more efficient budgeting process
By Editorial.Team, May 3, 2023The ambitious Sh3.6 trillion national budget now awaits Parliament’s scrutiny after the President assented to the Finance Bill FY 2023/24 proposals.
This comes at a critical time for the economy. When the government raises Sh2.5 trillion from taxes, despite difficulties in servicing debts and paying salaries to civil servants, this calls for more focus in executing programmes to ensure greatest value for every tax shilling spent.
To achieve the intended purpose, the funds available must first go to the most important sectors such as health, education, infrastructure development and agriculture. As such, ring-fencing funds towards essential and social protection services will be a key driver, and while ensuring development objectives are being met, however, the State must go further and ensure such funds go to the targeted areas and achieved the desired results.
The fact that the budget foresees spending less than 30 per cent on development, and the rest on recurrent, raises concern about the country’s low appetite for investment. This is as top economists in government estimate that close to 30 per cent of the budget is lost due to operational inefficiencies and cartels that siphon funds for private gain. It then begs the question, what percentage of the budget eventually gets to do the intended job?
In a nutshell, the budget tells the government that if it must succeed, it needs to tighten its belt further, cut wasteful spending, improve procurement processes and eliminate corruption in its ranks. But to deal with the source of the corruption, the government must resolve the challenges within the Integrated Financial Management Information Systems (Ifmis).
The downside is that every attempt to ensure resources are not wasted through brick-and-mortar accounting continues to be a major weakness in the utilisation of resources. The National Treasury ought, therefore, to seek solutions to reign on the weaknesses inherent in the system and ensure firewalls are high enough to stop charlatans from diverting taxpayers’ money.
While attempts to broaden the tax base and introduce innovative revenue-generating measures are welcome, this must be a gentle, predictable and all-inclusive process to avoid killing businesses, especially new ones.