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"id": 246635,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/246635/?format=api",
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"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
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"content": "In the meantime, I need not remind hon. Members that we will all be going back to the electorate next year and our management of these resources will be a major criteria by which we will be judged. Mr. Speaker, Sir, let me now to the financial outturn for the Financial Year 2005/2006. Allow me to briefly update hon. Members on the Budget outturn for the year just about to end. Our total revenues, including LATF were originally estimated at Kshs326 billion comprising Kshs296 billion in ordinary revenue and Kshs29.9 billion in Appropriations-in-Aid (A-in-A). Due to administrative challenges relating to the new customs automation management system and the strengthening of the Kenya Shilling against the major hard currencies, our total revenues are now estimated at Kshs325.6 billion, out of which Kshs291 billion is ordinary revenue and Kshs34.5 billion is A-in-A. Mr. Speaker, Sir, on the Recurrent Expenditure, hon. Members will recall that the Supplementary Estimates for the Fiscal Year 2005/2006 that were recently approved by this House had Gross Recurrent Expenditures of Kshs400 billion. This included Kshs30.5 billion financed 1414 PARLIAMENTARY DEBATES June 15, 2006 through A-in-A and payments financed directly from the Consolidated Fund Services amounting to Kshs132.5 billion leaving Kshs237.5 billion for discretionary expenditure. The Consolidated Fund Services for the financial year comprised of Kshs28.6 billion for domestic interest; Kshs4.7 billion for foreign interest and Kshs23.3 billion for pensions, gratuities and others. The Supplementary Estimates indicated that Kshs11.5 billion would finance external redemptions while domestic redemptions totalled Kshs64.3 billion. Mr. Speaker, Sir, on our Development Expenditures, the Supplementary Estimates for the Financial Year 2005/2006 also had Gross Development Expenditures of Kshs92.1 billion including Kshs29.9 billion to be financed through A-in-A. Therefore, Kshs62.2 billion was to be financed from the Exchequer. Mr. Speaker, Sir, turning now to the financial projections for the coming year, the total revenue target for the Financial Year 2006/2007 is Kshs375.4 billion which represents 21.4 per cent of our GDP. This comprises Kshs336.4 billion of ordinary revenue and Kshs38.9 billion of A- in-A. The targeted revenue is predicated on the on-going reforms in tax and customs administration. We have overcome the teething problems associated with the implementation of the customs modernization reforms and the difficulties with the new Simba 2005. In addition, efforts are also on the way to improve the efficiency of the large taxpayer office. Mr. Speaker, Sir, as hon. Members have noted from their copies of the Printed Estimates, Gross Recurrent Expenditure for the Financial Year 2006/2007 is estimated at Kshs412.5 billion. This includes Kshs31.1 billion to be financed through A-in-A and payments financed directly from the Consolidated Fund services amounting to Kshs129.1 billion leaving Kshs252.3 billion for discretionary expenditure. The Consolidated Fund services comprise Kshs32.3 billion for domestic interest, Kshs5.3 billion for foreign interest, Kshs22 billion for pensions, gratuities and others, and Kshs133 million for subscriptions to international organisations. In addition, I expect to finance external redemptions amounting to Kshs16.5 billion while domestic redemptions will amount to Kshs52.9 billion. Mr. Speaker, the Gross Development Expenditures for 2006/2007 are estimated at Kshs137.6 billion. Out of this, Kshs46.1 billion will be financed through Appropriations-in-Aid (A-in-A) composed of direct project financing of Kshs19.8 billion in loans; Kshs18.7 billion in grants and Kshs7.5 billion in local A-in-A. Consequently, I expect to finance net development expenditures of Kshs91.5 billion from the Exchequer comprising Kshs9.7 billion in grants, Kshs10.4 billion in loans and Kshs71.4 billion from the Government of Kenya. On External Grants, I have received commitments amounting to Kshs28.4 billion to finance projects. Details of all the donors and projects financed are included in the Development Estimates. I would, therefore, like to sincerely thank all those donors. Mr. Speaker, Sir, the overall fiscal deficit after the grants will amount to Kshs57 billion. After taking into account the net foreign financing of projects amounting to Kshs9.7 billion and projected privatisation receipts amounting to Khs18.2 billion, this will leave me with a financing requirement of Kshs29.5 billion which will be financed through domestic borrowing. This means that the Fiscal Framework for 2006/2007 is fully financed and there are no financing gaps."
}