Can Kenya afford this huge Budget?

By Nikhil Hira,

Nairobi,Kenya:Well President Uhuru managed to get his government’s budget estimates in on time unlike the furore that was caused when he was finance Minister. Of course Parliament does not seem to be ready for them - there is no budget committee in place to consider them. The revenue estimates were tabled in Parliament on May 7.

What is very clear is that the new government appears to be planning to continue the expansionist policy of its predecessor and once again we see a vastly increased spending plan.  Indeed the budget is set at in excess of Sh1.63 trillion against Sh1.4 trillion last year.  More to the point however, is the comparison to actual spend expected to 30 June 2013 which is a little over Sh1 trillion--a whopping 50 per cent rise.

There has been considerable confusion on where the Sh1.63 trillion comes from and this seems to stem from the manner in which the Constitution requires the estimates be presented. 

There are perhaps two reasons why we didn’t spend what we budgeted for last year. 

Firstly, government procurement processes have become more stringent which in itself is no bad thing. Secondly, and this should have been readily apparent a year ago, revenue targets are not being met which means spending is restricted.  Given that we were in an election year and it was an important test of the country’s maturity following 2007, it is hardly surprising that we are behind target. Indeed I said as much a year ago and continued to prattle on about it over the last 12 months.

Having had a look at the expenditure estimates, there are three points that must be made. 

One - whatever we set as our expenditure plan, we must look very carefully at whether we actually need to spend some of it.  “Cut out the waste” must be the buzz phrase. Two - many of the manifesto promises appear to have been included. And three - our MPs and Senators seem, within a month of being in office, to want to emulate the 10th Parliament and demand increased pay. Indeed the Parliamentary Service Commission estimates assume that they will get their way.  My message to them is “Folks we cannot afford it!” 

So where do we go from here? This is the largest budget in history and indeed we appear to be breaking the record every year. Unfortunately we do not seem to have cracked the basic tenant that all this has to be paid for and therein lies the issue. We continue to live on the never never and that cannot be good for future generations.

The views expressed in this article are the authors and not necessarily those of Deloitte East Africa.