PS: All projects are on course

November 25, 2008

, NAIROBI, November 25 – The government says it does not intend to defer any of the development projects that are earmarked for the current financial year.

Finance Permanent Secretary Joseph Kinyua told Capital Business on Tuesday that the government constantly monitors its overall budgetary performance and would be doing so next month to review the progress made.

“We have no intention of dropping our programs unless we clearly see that our revenue performance is so bad that we may not be able to sustain the kind of projects that we are doing,” he stated.

A section of economic experts had said the government would have to shelve some projects, arguing that it could not raise enough funds from the convectional means such as revenue collection, privatisation and capital inflows.

Mr Kinyua also maintained that excessive borrowing was not an option on their cards as that would impact negatively on interest rates and inflationary pressures.

“We would want the interest rates to remain at a level which would help the private sector to borrow money for supporting their businesses,” he added.

The PS did not reveal, however, what means they would use to finance the budget even as it becomes increasingly clear that the government is running out of viable alternatives.

Government’s plans to float a $500 million (Sh39 billion) sovereign bond have been suspended owing to the global financial crunch. The Kenya Revenue Authority failed to meet its revenue target in the first quarter of 2008/2009, falling short by Sh10.3 billion and blamed the shortcoming on the spill-over effects of post election violence, which resulted in a decline in economic growth.

Doubts abound as to whether the Authority will achieve its projected Sh492.9 billion for the year.

Mr Kinyua spoke after a consultative meeting of agencies involved in the implementation of the second phase of the Governance Action Plan (GAP) to deliberate on the measures and performance benchmarks that should be undertaken to deepen good governance in the country.

He said that since the process was started in 2005, the country’s revenues had increased six fold and gone along way in minimising Kenya’s dependence on donor funding.

Other speakers at the meeting including the Kenya Anti Corruption Commission Director Justice Aaron Ringera, representatives from the Justice and Constitutional Affairs Ministry and the State Law Office stressed the need for a well-functioning Judiciary that prosecutes corruption and economic crimes.

They concurred that there was a need to review the legislative and administrative framework to provide a coordinated and structured way of investigating and prosecuting all pending economic crimes cases.

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