INCONSISTENCIES BY KENYAN TREASURY

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 INCONSISTENCIES BY KENYAN TREASURY 

The International Budget Partnership- Kenya recently analyzed the Budget Review and Outlook Paper 2016. The findings are shocking! There were glaring differences between the figures provided by treasury in the Budget Review and Outlook Paper (BROP) and the Budget  Policy Statement (BPS) 2017. 

It is important to note that this year’s budget calendar is quite compressed. The whole process will take place at a faster pace to avoid a vacuum which will be caused by the 2017 general elections. The budget may be enacted by April, 2017. 

The BROP 2016 is both a backward and forward looking paper. It reviews budget performance for the financial year 2015/2016 and gives projections for FY 2017/2018. Ideally, the projections in BROP should be the same as those in BPS 2017 but shockingly, they are very different. 

Size of Wage Bill in Kenya

In the recent years, public debt has been a topic under discussion. The Office of Controller of budget recently reported that in FY 2015/2016, the government spent Ksh. 311 billion on public wage bill. This figure does not include salaries and wages paid to state corporation workers which was Ksh. 78 billion. 

The BROP’s figure for public wage bill is different. It stands at Ksh. 307 billion. So the figure changes depending on the source. At this rate we can trust no one. 

Public Debt 

The government of Kenya’s debts is another hotly discussed topic on social and traditional media. Public debt has always been ballooning over the years. The table below shows the trend: 

No. Financial Year  Amount
1. 2013/2014 2,433 billion
2. 2014/2015 2,844 billion
3. 2015/2016 3,618 billion
4. 2016/2017 3,850 billion

Public debt exposes a country to the burden of debt repayment. IBP_Kenya estimates that repayments of debts has been rising at approximately Ksh. 28 billion per year. 

Debt repayment has been made over the years as follows: 

Financial Year  Amount of Debt Repayment
2013/2014 279 Billion
2014/2015 393 Billion
2015/2016 421 Billion

Projections in Economic Growth Rate

I would not comprehend why one government body could give two conflicting figures for economic growth in two different documents. In the BROP, the National Treasury projects that the economy will grow by 6.1% while in the recently released BPS 2017 it is indicated as 6.0%?

As if that is not enough, the treasury gets into further confusion when listing the drivers of economic growth for the year 2017. In the BROP, they mention: growth in construction and manufacturing sector as the drivers. While in the BPS 2017 they mention increased domestic demand, infrastructure development and tourism as the main drivers of economic growth. What is the problem? It seems these items are not picked through research. 

Inflation 

It seems that inflation is the only parameter where Treasury has remained consistent. Inflation is pegged at 5.7% in both the BPS 2017 and BROP 2016.  We expected that a treasury with over a half a century of experience should do better!  

Defining terms: 

Appropriation in Aid: These are monies collected from either ministries or departments as user fees or donations. 

Ordinary Revenue: These are monies mainly raised from fees and taxes. 

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Editor-in-Chief

Geoffrey Kerosi is a prolific Kenyan writer based in Nairobi City. Email: info@kerosi.com. Skype: gkerosi Whatsapp: +254713 639 776 YouTube: Kerosi TV

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