Executive allocated the highest adjustment in estimates proposed by House committee which raises total 2020/21 budget to Sh3.1 trillion.

The National Assembly Budget and Appropriations Committee has proposed amendments to the 2020/21 fiscal budget estimates from Sh3 trillion to Sh3.1 trillion despite uncertainty over revenue projections.

Key adjustments proposed include allocation of Sh75.4 billion to the Executive, while Parliament is to be allocated additional funding of Sh2.6 billion to Sh37.8 billion. 

About 80 per cent or Sh2.2 trillion of the budget estimates n 2020/21 will go to recurrent expenditure, while Sh584.3 billion will go to development projects. 

According to the new proposal, the Presidency budget will grow by Sh30.1 billion—which will be the biggest adjustment following the inclusion of the Nairobi Metropolitan Services (NMS) under the docket.

Part of the proposed adjustment which goes to Parliament, Sh1.05 billion will go towards funding of projects or programmes under the NG-CDF, while Sh400 million will be used to complete the multi-storey office block.

Under the adjustment, the Senate will receive Sh170 million which will go towards increasing allocation to county offices.

“The committee also notes with concern that some funds earmarked for certain activities in line with legal provisions have been adjusted downwards,” BAC chairman Kimani Ichung’wa said.

He said the committee noted that the NG-CDF projects had been reduced by Sh10 billion from the 2019/20 baseline. 

Ichung’wa explained that earmarking of funds is typically carried out to guarantee consistent funding of projects or programmes deemed to be vital in order to ensure their continuity.

The committee said failure to adhere to these legal provisions is therefore not only illegal but also disruptive to ongoing projects. 

“The current stimulus programmes across the ministries can be implemented better if the NG-CDF framework is utilised,” he said.

Other Ministries and State Departments (MDAs) set to see a rise in spending include the National Treasury by Sh20.8 billion, Tourism by Sh3.9 billion and Infrastructure by Sh3 billion.

Current proposals

In the current proposals, the currently overwhelmed Ministry of Health will see its allocation fall by Sh2.3 billion to Sh111.7 billion.

State Department of Interior and Citizen Services will lose Sh2.6 billion from its original allocation while Transport and ICT will see cuts of Sh1.5 billion and Sh1.4 billion respectively.

The adjustments come amid claims that the increase will pile pressure on proceeds from ordinary revenue, which is projected at Sh1.6 trillion in the next financial year.

According to BAC the proposal by the National Treasury to borrow Sh904.7 billion, which is an 18 per cent increase from Sh768.8 billion borrowed in 2019/20 is likely to through the country off the balance.

Analysts admit that of concern to the public is the expected growth of Consolidated Fund Services to Sh1.04 trillion – which is approximately 55 per cent of the projected revenue for financial year 2020/2021.

Churchill Ogutu, head of research as Genghis Capital,  said what the rise of borrowing implies is that for every Sh100 generated through ordinary revenues, Sh55 is going towards settling debt obligations.

“This of course is a strain more so considering that public debt obligations is a first charge item and in the event that revenues are not forthcoming, will lead to more debt accumulation,” he added. 

He said Budget Policy Statement (BPS) had capped national government expenditure at Sh1.836 trillion but BAC has recommended Sh1.883 trillion, an increase of Sh46.7 billion.