HOW UHURU’S REGIME SPENT KSH 23.2 TRILLION IN TEN YRS.

The Jubilee administration has spent at least 62.3 per cent of Sh23.2 trillion on recurrent expenditure, a scenario consulting firm, Ernst & Young attributes to fiscal indiscipline.

In a pre-budget media briefing, the the tax and audit firm indicated that the government has spent Sh14.5 trillion in the past decade on consumption, with a huge chunk funding salaries and allowances.

“There is a danger when a country spends over 60 per cent of its budget including debt on recurrent expenditure,” Francis Kamau partner and tax leader at EY East Africa said.

He said there is an urgent need to regularise the fiscal plan to strike a balance between recurrent and development budgets.

In the past decade, Kenya spent Sh5.5 trillion or 23.7 per cent of the entire budget on development while Sh3.2 trillion pr 13.8 per cent went to county governments.

The country has continued to spend most of its resources to settle expansive wage bills despite a 2019 declaration to maintain the public sector wage bill within the stipulated target and international benchmark of 7.5 per cent of GDP for sufficient fiscal space.

Speaking at the National Conference on Transforming Kenya’s Economy Through a Fiscally Sustainable Public Sector Wage Bill held in November 2019, National Treasury CS Ukur Yatani said the country’s wage bill was shrinking resources for development.

“In the next five years, public sector wage bill must deliberately be maintained within the stipulated Public Management Fund Act target to enable the country to have sufficient fiscal space to meet its obligations”, Yatani said.

The wage bill currently accounts for 48.1 per cent of the country’s revenue, more than 35 per cent as stipulated in the Public Finance Management Act. 

Although the government projected a total expenditure of Sh3.03 trillion in the current fiscal, it has since grown to Sh3.6 trillion with the recurrent budget accounting for Sh2 trillion or 16.2 per cent of GDP.

The National Treasury has had to introduce several supplementary budgets to satisfy the government’s recurrent budget appetite. 

EY has projected the country’s 2022/23 budget to expand further beyond estimates. 

The exchequer has proposed an overall expenditure and net lending of Sh3.23 trillion for the financial year starting July 1.

On April 7, Yatani is expected to allocate Sh2.14 trillion to recurrent expenditure (15.6 per cent of GDP) with Sh712 billion set aside for development expenditure. 

To help meet the expenditure, Kenya Revenue Authority is expected to collect Sh2.14 trillion up from Sh1.99 trillion.

Total revenue including Appropriation-in-Aid (A-i-A) is projected at Sh2.41 trillion.

The government is expected to borrow at least Shh776 billion to meet the budget deficit.

By: The Star