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The budget office said state agencies should  implement expenditure cuts in areas  such as travel, training and entertainment including suspending non-critical development spending, amid cash constraints owing a slowdown in economic activity/FILE

Finance

Parliamentary budget office urges state entities to cede Sh122bn shortfall demand

NAIROBI, Kenya Apr 8 – A report released by the Parliamentary Budget Office proposes that all government ministries and state agencies should forego an estimated Sh122 billion budget shortfall in the wake of coronavirus pandemic.

The budget office said state agencies should  implement expenditure cuts in areas  such as travel, training and entertainment including suspending non-critical development spending, amid cash constraints owing a slowdown in economic activity.

“In the coming three months, ministries, departments and agencies should absorb the full impact of revenue collection shortfalls amounting by implementing expenditure cuts in all discretionary proposals to mitigate against the negative impact of COVID-19 on the economy,” part of the report noted.

The budget office, in the report published on April 2, identified 17 areas including travel, training, entertainment and non-critical development spending.

As of April 8, coronavirus had infected 172 and killed 6 people in the country including a six year old boy. Seven people have recovered and been discharged.

Treasury Cabinet Secretary Ukur Yattani Tuesday said his ministry was engaging other arms of government to ensure they re-allocate foreign and domestic travel funds in a bid to create a contingency plan to cushion against adverse effects they virus may have on the economy .

“As it stands we do not expect any individual government department having a problem with these measures,” he said while receiving a Sh 2 billion donation from the Office of the Director of Public Prosecutions.

CS Yattani said the government was working to re-align the budget and review the supplementary budget to ensure Kenyans are catered for.

President Uhuru Kenyatta has already set up a COVID-emergency fund which is expected mobilize resources from multinationals, private sector and individual Kenyans to support efforts to contain the virus.

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The report released April 2  further proposed an additional borrowing of up to Sh150 billion aimed at among many things, providing social support to vulnerable populations in the wake of COVID-19 pandemic.

The funding, the office said, will cushion vulnerable persons, laid off workers and eligible self-employed persons who have been negatively impacted by the slowdown in economic activities as a result of the pandemic.

Of the Sh150 billion, the office proposed that Sh70 billion be allocated as social transfers to vulnerable persons, laid off workers and eligible self employed persons.

In the proposal, Sh30 billion of Sh150 raised in consessional loans will be directed to sectors which are badly hit by the pandemic in form of payroll support and concessional interim credit facilities.

If implemented, the Big Four Agenda sectors will receive a Sh 40 billion boost which is expected to stimulate economic activities through concessional credit facilities, loan guarantees and agricultural input

“The fiscal stimulus funds should be allocated towards protecting ongoing investments critical sectors which can help support economic activity and employment during the crisis,” the report added.

Globally, the disease has killed nearly 82,000 with more than 1.4 million infections what the United Nations term as the worst crisis since the end of World War 2.

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