Treasury tables Sh2.7tr budget, cuts spending
Lewis Njoka and Noel Wandera
The Treasury has proposed a Sh2.7 trillion budget in the next financial year (FY) as the government pursues a fiscal consolidation policy towards debt sustainability.
The figure proposed for FY 2020/21 was tabled in Parliament yesterday with a marginal decrease from the Sh2.87 trillion proposed in the 2019/20 financial year budget even as the government ring fences cash for the Big Four agenda.
In the fiscal consolidation, which refers to a government undertaking policies to improve its financial health accompanied by improved revenue and better aligned expenditure, ministries, state departments and government agencies will be required to be efficient in allocating resources and demand value for money to promote sustainability.
Of the Sh2.7 trillion the government plans to spend, Sh1.78 trillion (15.3 per cent of the gross domestic product) will go to recurrent expenditure while Sh587.3 billion (five per cent of GDP) will go to development.
Within the same period, Treasury projects revenues collected to increase to Sh2.1 trillion in FY2020/21 down from Sh2.08 trillion in the FY2019/20.
“In FY2020/21 revenue collection, including appropriation-in-Aid, is projected to increase to Sh2,1 trillion (18.3 per cent of GDP) up from the estimated Sh2.1 trillion (20.1 per cent of GDP) in FY2019/20.
Ordinary revenues will amount to Sh1.9 trillion (16 per cent of GDP) in FY2020/21 from the estimated Sh1.8 trillion (17.8 per cent of GDP) in FY 2019/20,” reads the 2020 budget policy statement in part.
This financial year, fiscal deficit is expected to reduce to Sh571.2 billion down from 657.4 billion in FY2019/20.
The government proposes to set aside Sh150.6 billion to the agricultural sector in the medium term period between the financial years 2020/21/22 and 23.
Through the funds, the government will be gunning to create a conducive environment for sustainable development of agriculture and the blue economy, enhanced access and use of land and improved agricultural research for socio-economic development and industrialisation.
During this financial year beginning June 2020, the sector has been allocated Sh48.1 billion out of which Sh17.4 billion will be recurrent and Sh30.7 billion for development.
In the financial year 2021/22, the sector has been allocated Sh48.6 billion with Sh17.9 billion for recurrent and Sh30.7 billion for development.
In the FY 2022/23, budget allocated is Sh53.9 billion of which Sh18.3 billion will be for recurrent expenditure and Sh35.6 billion for development.
The education sector will receive Sh497.8 billion in the coming budget to be read in June by Treasury Cabinet secretary Ukur Yatani, out of which Sh479.1 billion will be recurrent while Sh18.7 billion will go to development.
This is against Sh528.4 billion in FY2021/22 of which Sh507 billion will be for recurrent and Sh21.4 billion for development.
In FY 2022/23 the sector has been given Sh544.2 billion out of which Sh519 billion will be recurrent and Sh24.7 billion for development.