The National Budget: What Wanjiku expects ahead of the reading

The National Budget for the 2019/2020 financial year will be presented in parliament today (Thursday 13^th June) by the Treasury CS Henry Rotich.

As the budget reading nears, Kenyans feel the budget is not designed to favor them but those in power. According to the majority of Kenyans, the budget has failed to capture the more pressing needs and focused on projects that will not have a direct impact on the common mwananchi.

Most Kenyans feel the budget should have been tailored towards addressing the escalating prices of commodities, especially foodstuffs. For instance, the price of maize is out of reach for most Kenyans across the country.

A 90-kilogram bag of maize is retailing at an average of 3,600 shillings across the country, up from just 1,800 shillings three months ago. In some areas, the price of the 90-kilogram bag of maize has hit the 4,000 shilling mark.

The increase in prices of maize has led to an increase in the price of maize flour by more than 30 percent. A 2-kilogram packet of maize flour is retailing at between 115 and 130 shillings from just 85 shillings three months ago.

Prices of fuel have also continued to rise over the months with the government having imposed an 8 percent Value Added Tax on all petroleum products. An increase in fuel prices, especially diesel, leads to an impact on the inflation rate as it increases the cost of basic commodities.

Meanwhile, in the budget

The Budget and Appropriations Committee (BAC) has increased the overall budgetary allocation to the National Government by 24.9 billion shillings to 1.93 trillion shillings bringing the overall budget to 3.1 trillion shillings.

The increased allocation by BAC is towards public finance management (8.9 billion shillings), vocational and technical training (8.3 billion shillings) and ICT infrastructure development (6.4 billion shillings) vote items.

On the other end of the spectrum, funding towards primary education, secondary education, and the blue economy has been decreased by 1.5, 1.2 and 1.3 billion shillings respectively, from the draft budget estimates.

Recurrent expenditure accounts for 63.6 percent of the total national government expenditure while development spending accounts for the remaining 36.4 percent.

The major items under recurrent expenditure are Operations & Maintenance and Wages and Salaries. Development spending remains a key concern going by past budget performance, in particular with regards to absorption of funds and stalled projects.

With National Treasury targeting a 10.0 percent return on public investments, it is of necessity that higher quality and viable public projects should be pursued and implemented. The focus should also be towards the tradable sectors in order to boost the trade imbalance

The overall allocation to the mandatory charge, Consolidated Fund Services (CFS), is 805.8 billion shillings in FY2019/20; 12.2 percent y/y decline from FY2018/19 estimate of 918.1 billion shillings.

This is mainly attributed to the decline in public debt from 832.1 billion shillings in the current financial year to 696.6 billion shillings in FY2019/20.