Govt to cut allocation to counties due to a Sh70Bn shortfall

March 7, 2018
Treasury CS Henry Rotich has refuted claims that the Government is broke; “Promising to collect a certain amount of money and collecting an amount lower does not necessarily equate to being broke./FILE

, NAIROBI, Kenya, Mar 7 – The National Treasury has admitted that the government is running low on funds and has a deficit of Sh70 billion in its 2017/2018 financial year budgetary allocations for the counties.

Treasury Cabinet Secretary Henry Rotich says the prolonged electioneering period for resulted in a slowdown in business activity, in turn, curtailing the expected revenue collection in the 2017/18 financial year.

In his presentation to the Senate Committee on Finance and Budget, Rotich has also blamed the drought for the shortfall in revenue collected by Kenya Revenue Authority.

As a result, Treasury is recommending reducing its budget allocation to county governments as it seeks to raise the remaining monies

Already, Rotich says, the National government has adjusted its expenditure to the minimum to match the available funds.

“In an attempt to meet the shortfall and catch up, we have tried to borrow locally, which wasn’t very easy because of the uncertainties during the repeat elections. In short, we are lagging behind in terms of revenue,” Rotich said.

Makueni Senator Mutula Kilonzo Jr, however, urged the CS to admit that the government was indeed broke, to which Rotich refuted saying; “Promising to collect a certain amount of money and collecting an amount lower does not necessarily equate to being broke.”

He, however, said that they were discussions with Custom and Domestic departments at Kenya Revenue Authority to formulate a deficit raise consolidated program with the target of reducing the deficit from 7.2 in this financial year and a further 6 percent in the next financial year.

“We have to cut expenditure across the board in all arms of the government in order to match our revenues with our expenditure.”

Treasury has already disbursed 43 percent of the Sh302 billion it was expected to disburse the full budgetary allocations to counties in the current financial year.

“What we are proposing to the National and county governments is to live within what we’ve allocated to you,” Rotich told the committee.

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