Treasury has used an ‘accounting trick’ to make Kenya’s budget smaller than it actually is and help cover a Sh500 billion shortfall. The Institute of Economic Affairs (IEA), a public policy think tank, says Treasury is not being honest on the actual size of Kenya’s budget.
The budget proposal data that he will be presenting today shows that after receiving tax revenue, grants, Government fees, including court fees and revenue from parastatals, there is a big mismatch between revenue and expenditure plans. “Difference between Sh2.5 trillion and Sh3 trillion is principal debt amortisation and rollovers, which are not treated as expenditures above the line.
Our Financial Statement to be submitted tomorrow (today) will provide the details on the accounting treatment,” Treasury Cabinet Secretary Henry Rotich told The Standard in a statement. Confusion on the actual size of the budget was first captured by Parliament when it tabled values of next year’s budget.
Planned expenditure exceeds the targeted revenue by Sh540 billion. To have a balanced budget, income must be equal to expenditure. On page nine of the Budget and Appropriations Committee report on the budget estimates for the financial year 2018-2019, legislators put the overall budget for the new financial year at Sh3.074 trillion. This amount can build 10 standard gauge railways from Mombasa to Nairobi or build 30 Thika super highways.
The committee breaks down the budget into five key expenditure lines. It has allocated Sh1.6 trillion to the national government to run its operations and fund the big four agenda. If the budget is implemented as planned, the Judiciary and Parliament will receive Sh17.7 billion and Sh42.5 billion respectively.
The Consolidated Fund Services (CFS), where Government gets money to repay public debt, pay salaries and allowances for constitutional office holders and subscriptions to international organisations got Sh962.5 billion. Counties received Sh372.7 billion. This brings the total budget to Sh3.07 trillion. To balance the budget, Treasury is required to declare how it plans to fund the budget through taxes, grants and borrowing.
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