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{
    "id": 1259643,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1259643/?format=api",
    "text_counter": 33,
    "type": "speech",
    "speaker_name": "Kiharu, UDA",
    "speaker_title": "Hon. Ndindi Nyoro",
    "speaker": null,
    "content": "There are also several other things, with regard to Recurrent Expenditure, given the period that we are considering this Bill. In the recent past, we have had to draw money from the National Treasury to support Kenyans who may need food. Some of that money in the form of Recurrent Expenditure is going into that sphere. I also want to cite something else and bring it to the attention of Members. It is not bad to repeat it so that we get sense out of it. I was talking to Hon. Gikaria today because his Committee oversees ministries, departments, and agencies (MDAs) that could be very rich in Appropriations-in-Aid (A-in-A). We noted and commented on the same point during the Second Reading of the previous Bill that there is a deliberate decision cutting across almost all MDAs to understate A-in-A. This country is very rich. As we serve in this House and represent Kenyans, I have concluded that except for departments that offer pure public goods like security, public health and basic education, majority of our MDAs could run without drawing from the Exchequer or the Consolidated Fund. This country is very rich and has great capacity through institutions of Government to collect A-in-A. We noted something that drove me to make this point. We always have a gross under-estimation of A-in-A every time we consider the main budget. Therefore, when we consider the Second Supplementary Estimates, MDAs show up to request the National Treasury to be permitted to expend resources in the form of A-in-A. That is usually very tempting because when MDAs appear before the Committee, they do not request for any money; they only request for authorisation. It becomes very tempting to give them that authority. We resolved as the Budget and Appropriations Committee that going forward, we will base projections of A-in-A on recently collected A-in-A, and not through projections made by various MDAs. Lastly, we have also seen the tendency for a very low absorption rate of resources on foreign-funded projects. Any project that is supported by foreign development partners has a very low absorption rate because of the processes and delays in availing part of the Exchequer in terms of counterpart funding on some occasions. We may seek to enhance this in future by being more forward-looking. When a project is conceptualised, we need to be aware of it early enough as a Government and avail resources for counterpart funding. We can then draw on the resources that are availed by development partners. When a Supplementary Budget like the one we are considering comes to the Floor of the House, there are always a few options. You either draw back in terms of expenditure, or you expand your deficit. We have made a unanimous decision as a country and as this House that the “borrowing hole” is already too deep such that we cannot conceptualise digging it further. Therefore, our only resort is to marginally reduce expenditure, so that we do not continue over-borrowing. As I wind up, in our consideration of the same yesterday, I stated some figures which I want to repeat for clarity. Last year's deficit in the printed estimates, and not the revised ones, was Ksh860 billion. Around or before the elections, Ksh200 billion was spent under Article 223 of the Constitution. When you spend money under Article 223 of the Constitution without a commensurate revenue stream for that expenditure, that expands the deficit. Therefore, for clarity's sake, the deficit that we have been dealing with in this financial year is Ksh1.1 trillion, which is much higher in terms of the deficit to Gross Domestic Product (GDP) ratio. In the printed estimates, the ratio was 6.2. It is much higher when you add in the expenditure under Article 223 of the Constitution. We will be debating the Supplementary Appropriation Bill for the financial year that we are budgeting for later today. We have been able to reduce the deficit from Ksh1.1 trillion to Ksh718 billion in the next financial year. We have reduced the deficit to GDP ratio from 6.2 per cent to 5.7 per cent in the Supplementary Appropriation Bill. In the 2023/2024 Financial Year, we have further reduced it, even below the projections of the International Monetary 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."
}