NAIROBI, Kenya, Feb 8 – President William Ruto’s government has proposed to increase the spending plan for the 2022/23 financial year to Sh3.72trillion from Sh3.36trillion, with the main focus on recurrent spending to narrow the country’s fiscal deficit.
In the Supplementary Budget for Financial Year 2022/23, recurrent expenditure has been increased by Sh92 billion to Sh1.49 trillion from Sh1.4 trillion.
Recurrent expenditure usually includes civil servant salaries, domestic and foreign interest payments, pensions, and fuel costs for the government fleet of vehicles.
Under recurrent expenditure, spending in the state department for interior and citizen services is expected to decline the most with a Sh31.44 budget billion cut, while the ministry of petroleum and mining increases the most to Sh63.9billion, from Sh21.3billion.
As for development expenditure, the Treasury has proposed a Sh106.3billion cut to Sh609billion from the original budget of Sh715.3 billion.
Under development expenditure, the state department for infrastructure budget is set to get a 31.0 per cent budget cut to Sh104.7billion, from Sh151.8billion as the government slows down on new infrastructure projects.
The supplementary estimates will see overall Ministerial Expenditure decrease by 13.3billion to Sh2.1trillion from the original estimates of Sh2.11 trillion.
“The decrease is largely on account of austerity measures to contain expenditures to remain within sustainable fiscal path that will also signal fiscal consolidation in the future,” said Treasury CS Njuguna Ndung’u.
In the supplementary budget estimates, Treasury now projects the country’s fiscal deficit level inclusive of grants to stand at 5.7 per cent down from the original projection of 6.2 per cent.
Overall expenditure and net lending has been revised from the original projection at 24.0 per cent to 23.4 per cent of GDP.
Total revenues are projected to decline from the original of 17.6 per cent of GDP to 17.4 per cent of GDP while overall expenditure and net lending has been revised from the original projection at 24.0 percent to 23.4 per cent of GDP.
Further, net foreign financing has been revised from the original projection at 2.0 per cent to 2.7 per cent of GDP.
Net domestic financing has been revised from the original projection at 4.2 per cent to 3.0 per cent of GDP.
Treasury noted that the FY 2022/23 Budget was prepared under a tight fiscal framework arising from subdued growth occasioned by shocks in the form of lingering Covid-19 effects, climate change (drought) global supply chain problems and the ongoing Russia – Ukraine conflict
This saw the exchequer also include spending drought-related interventions including emergency relief food, provision for subsidized fertilizer to farmers, subsidies for maize and fuel among other emergencies.
The Supplementary Estimates will also address issues related with access to credit via market intervention (Hustlers Fund); revenue mobilization efforts; security operations; Equalization Fund; salary adjustments; and changes in development partners’ funded projects.
