MPs approve Sh26b extra budget

April 29, 2009 12:00 am

, NAIROBI, Kenya, Apr 29 – Parliament on Wednesday authorised the government to withdraw Sh26 billion from the Consolidated Fund to meet its budgetary shortfalls.

Finance Minister Uhuru Kenyatta who moved the Motion said the government’s budget for the fiscal year 2008/2009 was affected by a number of challenges including the global economic recession.

“The implementation of the budget has indeed faced numerous challenges which have undoubtedly disrupted the original assumptions that form the basis of the budget,” he said.

Mr Kenyatta said the economic crisis also led to the suspension of the Sovereign Bond which was estimated to raise Sh33.6 billion.

He said predictions of a 5.8 percent economic growth had to be downscaled to three percent, and blamed the 2008 post-election violence for the slow growth rate which he said affected tourism and other businesses that caused a revenue shortfall of Sh7.2 billion.

The Minister further mentioned delays in the privatisation process which denied the Exchequer the expected receipts of Sh8 billion.

The Deputy Prime Minister further said Ministries were forced to ask for additional resources to alleviate the effects of post election violence, the food crisis, increased fuel and fertilizer prices.

Mr Kenyatta estimated a financial gap of Sh71 billion which, he said, the government was working on to alleviate the difference. 

“To close the financing gap the government has instituted expenditure austerity measures which realised Sh22 billion,” he said.

The Minister said the government prioritised programmes and postponed the ones that were less urgent and were unlikely to be implemented in the current financial year.

“We have also realised savings on interest payments amounting to Sh2.8 billion associated with the postponement of the Sovereign Bond and also on domestic borrowing where we realised lesser payment as result of reduced interest rates,” he said.

To arrest the financial gap even further, Mr Kenyatta said the government reduced interest rates to improve domestic borrowing which earned revenues of Sh8.1 billion.

But despite all the efforts, he said the government still had a gap of Sh38 billion which would be borrowed from the domestic markets.

He assured Parliament that the government would restrain its expenditure to ensure it is able to sustain the borrowing.

During their contributions to the Motion MPs urged the Minister to prioritise challenges that were facing Kenyans especially on employment, security and food.

They asked him to ensure the money allocated to the programme Kazi Kwa Vijana trickled down to the youth.

Garsen MP Danson Mungatana criticised the government for prioritising unnecessary projects and also wasting public resources.

Housing Minister Soita Shitanda also asked the Minister to cut down the budget spent on vehicles for public servants saying it was not necessary especially during the tough economic times.

Meanwhile, the House failed to discuss recommendations on the Chair and Members of the Interim Independent Electoral Commission contained in the Parliamentary Select Committee report on Review of the Constitution tabled, because committee chairman Mohammed Abdikadir was absent.


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