​Cabinet Approves Kshs 2.62 Tn Budget Plan for FY 2017/18

By David Indeje / February 9, 2017


The Kenyan Cabinet chaired by President Uhuru Kenyatta on Wednesday approved Kshs 2.62 trillion budget for fiscal 2017/19, with a projected revenue collection of Kshs 1.704 trillion aimed at lowering its fiscal deficits, containing inflation within the target range and improvement in the external current account balance.

The proposed budget for the year provides adjustments to provide room for allocation of Kshs 100 billion for salary increases for all Public Servants starting July 2017.

There is also allocation for the harmonization of Public Sector salaries and allowances; Civil Service Pension; house and hardship allowances; recruitment of 10,000 police officers; and recruitment of 5,000 teachers.

The cabinet noted that the budget has increased from Kshs 2.48 trillion in 2016/17 Budget to Kshs 2.62 trillion.

However, “The allocations in the FY 2017/18 Budget will broadly remain the approved Budget Policy Statement (BPS) 2017,” read the Cabinet statement.

Key highlights of the budget proposals include:

  • Revenue collection is projected to be Kshs 1.704 trillion compared to 1.500 trillion projected for collection in the current year.
  • Donor commitments have been firmed up and disbursements are expected to hit Kshs 2561.1 billion in both grants and loans.
  • To ensure pro-poor growth and sustainable development, the 2017/18 budget will continue to focus on the 2nd Medium Term Plan of the Kenya Vision 2030 and the Government priorities under a five-pillar transformation agenda.
  • The proposed budget for FY 2017/18 takes into account the recommendations of Parliament on the 2017 Budget Policy Statement and the agreed priorities.

According to the Budget Policy Statement themed, ‘consolidating economic gains in an environment of subdued global demand’, Kenya’s economic growth prospects for the FY 2017/18 and the medium term takes into account the global slower growth in demand, particularly investment, which is especially pertinent to generate international trade flows in the form of capital goods and intermediate inputs. Further, it takes cognizance of the domestic environment including the general election to be held in August 2017.

The country’s GDP is projected to grow by 5.7 percent in 2017 from about 5.9 percent in 2016 with a projected decline to 6.9 percent in deficit.

“Fiscal deficit, as a percent to GDP, is projected to decline to 6.9 percent in FY 2016/17 and 6.4 percent in FY 2017/18 which takes into account one off 2017 General election related expenditures. Thereafter the deficit is projected to decline to 4.1 percent of GDP in 2019/20.

The Financial Year 2017/2018 budget estimates will be submitted to Parliament for debate.

Treasury Cabinet Secretary Henry Rotich also anticipates to read the 2017/2018 Budget two months earlier to avoid challenges that may come with the scheduled August polls elections.

Related: Month of January Characterized by Low Treasury Bill Subscriptions

About David Indeje

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_Indeje David can be reached on: (020) 528 0222 / Email: [email protected]

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