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{
    "id": 1076645,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1076645/?format=api",
    "text_counter": 390,
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    "speaker": null,
    "content": "Hon. Deputy Speaker, we made a few observations on the pending bills. Despite the presidential directive in June 2019 that all pending bills by Government agencies are cleared immediately, they continued to present a significant challenge in almost all sectors of the Budget. It is noted that the veracity of some of those pending bills is also in doubt. Each Committee that came before us had a huge list of pending bills, both verified and unverified. The National Youth Service, for example, has a pending bill of Kshs16 billion. There is hue and cry everywhere that the Government is not paying. It is a challenge that we are throwing to the National Treasury because pending bills should always be the first charge. Unfortunately, it is not happening. Two, there is the issue of stalled projects. This has become a permanent feature in our Budget. There is non-adherence to project guidelines issued by the National Treasury, including the introduction of new projects before completion of existing ones despite the thin spread of resources. A policy must be implemented to ensure enforcement of the PFM Act and the National Treasury guidelines. Sanctions should be instituted to MDAs that introduce new projects before completion of the existing projects. In every Budget, there are institutions that must be included. There is Mitihani House in South C that was started about 40 years ago, our own building here and Kenya Industrial Research and Development Institute (KIRDI). You will literally find buildings in every part of the country that are incomplete. They must now be concluded. The third one is on duplication of functions. There is an overlap of functions between some spending agencies as well as between some programmes. There is need to streamline functions which will crucially eliminate duplication and reduction of resource wastage. There is also failure of the Medium-Term Expenditure Framework (MTEF) process. There appears to be very little focus on the medium-term budget despite the MTEF process requiring budgeting to focus on a three-year rolling plan to ensure predictability of the Budget. Poor performance of MTEF is partly attributed to the failure to adapt to initially weak budget systems as well as limited institutional capacity. The situation is made worse by inadequate support and agency buy-in for their mode of budgeting. Having made those recommendations, I now want to focus on the macro-economic framework underpinning this year’s Budget. The proposed Budget is anchored on a Gross Domestic Product growth projection of 6.3 per cent in the Financial Year 2021/2022 and a 6.1 per cent over the medium term. The key drivers of this growth are a stable macro-economic environment, improved domestic consumption and improved external demand. Further, export demand is expected to increase due to reopening of economies globally as global vaccinations continue to gain traction. Even though this economic growth projection is plausible, the Committee is concerned that some of the growth fundamentals are potentially weak. For instance, given the current economic condition, private consumption has reduced considerably due to increased unemployment and income losses and this may persist through the year 2021. A prolonged pandemic would also delay the full recovery of tourism and also the hospitality industry. Further, there are concerns that the Budget allocations are not really addressing supply side constraints pertaining to exports and this has severely constrains the country’s export earning potential. Kenya’s export quality has largely remained unchanged with the country exporting more primary products as opposed to manufacturing goods. Other risks to the macro-economic outlook include the rising fuel prices, foreign exchange rate fluctuation, political uncertainty as the country approaches the general elections and the possibility of introduction of strict COVID-19 Pandemic containment measures in the second The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}