All eyes on Parliament ahead of ambitious Sh3.6tr budget

All eyes turn to Parliament this week as National Treasury Cabinet Secretary Ukur Yatani presents Kenya’s biggest budget, which has soared to Sh3.6 trillion.

Yatani will present the 2021/22 budget at Parliament Buildings on Thursday, and is expected to outline how the budget, which leverages President Uhuru Kenyatta’s Big Four projects, will spur economic growth amid Covid-19 shocks.

National Assembly Deputy Majority Whip Maoka Maore (Igembe North) said the House would be keen on the budget and nothing else. “This is the budget reading week. Members will be occupied with the budget and no other business,” said Maore.

The National Assembly, which resumes its sittings tomorrow afternoon, will find a full in-tray with the budget and gazettement of the 34 judges and their subsequent swearing in expected to feature prominently.

Under the proposed budget, the Executive, Parliament and Judiciary were allocated Sh1.879 trillion, Sh37 billion and Sh17 billion respectively, while county governments are expected to share Sh370 billion.

To raise the funds, Treasury is expected to amend various acts, including the Income Tax Act, VAT Act, Exercise Duty Act and Tax Procedures Act. 

Treasury will also be in the market with new debt instruments including green bonds to help fund the ambitious budget.

“We are proposing several amendments to enhance tax administration and dispute resolution operations.

These proposals alongside others contained in the Finance Bill will help create the legal and policy framework to achieve our medium-term budget goals,” said Yatani when he presented the budget estimates.

Recurrent expenditure

In the coming financial year, which begins in July, Treasury has proposed a Sh3.7 trillion budget of which Sh1.3 trillion will go to recurrent expenditure and another Sh1.3 trillion to the Consolidated Fund Services (CFS).  Allocation to CFS is used to pay public debt-related expenditures.

Big Four Agenda projects have been allocated Sh135 billion despite being touted as the main driver of economic development in the country while affordable housing has been allocated only Sh14.9 billion. So far, the government has constructed only 1,370 housing units against a target of 500,000 units by 2022.

Considering that 2021/22 is the last full financial year for administration of the Big Four Agenda, fears abound that the agenda may not be achieved going by the funds allocated to these projects.

“Given the fact that this is the flagship agenda for the government and the role that it is expected to play in economic growth, a review of projects status and plan of action is necessary to ensure that at least some of the targets are achieved by 2022,” said a report from the Parliamentary Budget Office.

“It is observed, however, that the Big Four Agenda does not appear to have much prominence in the budget.

Other than an indication that it has been allocated Sh135 billion in the next financial year, there is no further discussion or how the government will ensure that at least a certain percentage of the targets are met,” it added.

Only Sh666.5 billion is earmarked for development, way below the Sh1.3 trillion that will be used to service debts.

While the development allocation meets the one-third (of national government allocation) threshold ideal for development budgetary allocation, analysts are questioning the quality of projects selected saying some of them have little or no ability to spur economic development.

Besides budget reading, the omission of six out of the 41 judges recommended for appointment by the Judicial Service Commission is likely to elicit debate.

Yesterday, Meru Senator Mithika Linturi charged that the National Assembly should initiate impeachment of a President where there is gross violation of the Constitution.

“We have a President who has committed serious breaches of the Constitution. This kind of impunity should be condemned,” said Linturi.