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"id": 276489,
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"content": "programme was aimed at containing non-priority and un-productive Recurrent expenditure, so as to bring the Budget deficit down and ensure sustainable public debt. Based on these underlying assumptions, the Budget approved by this Parliament, after adjustments, contained a total expenditure of Kshs1,159,005,000 and its financing was as contained in the Appropriations Act. Discretionary Recurrent and Development Expenditure amounted to Kshs552.9 billion and Kshs213 billion respectively, while non- discretionary expenditure for contigency services (CFS) payments amounted to Kshs209.5 billion. By the time of approving the Budget, the contingency funds amounting to Kshs1.5 billion had been utilized for drought mitigation measures, leaving a balance of only Kshs0.5 billion. Mr. Speaker, Sir, between July and December 2009, the micro-economic situation in this country had slightly changed . High inflation from higher food and fuel prices and deteriorating global economic conditions had weakened economic growth. The shilling exchange rate had weakened, thus putting further pressure on inflation. The tightening of the monetary policy has, as expected, resulted in rising domestic interest rates both in the money market and auctions for Government securities, thus putting further pressure on the Budget. Given these circumstances, the implementation of the Budget for this year has proved very challenging in the following aspects:- One, revenues have fallen behind targets mainly due to changes in the holding mechanisms and slower than projected growth. Two, borrowing has been constrained because of the volatility in the money market interest rates and investor uncertainty brought about by high inflation and weakening of the shilling. We have, therefore, avoided borrowing from the domestic market. This has resulted in cumulative borrowing by the end of March rising from Kshs90 billion to Kshs19.9 billion in January 2012. We have also had expenditure pressures. On the expenditure side, we are faced with additional spending measures amounting to Kshs175 billion to support, among others, the salaries, implementation of the new Constitution, cushioning vulnerable households from the impact of drought and higher food prices and fuel prices, as well as dealing with the security operations along our borders with Somalia. The weakening of the Kenya exchange rate against major currencies has also increased the payment of our external debt in shilling terms and Government expenditure on imported goods and services. Mr. Speaker, Sir, in order to finance this additional expenditure, we have, in collaboration with the line ministries, instituted austerity measures and identified cut backs in the funding of projects. The austerity measures were based on the performance of expenditure over the last seven months of this financial year. We have also had to reassess the absorption of earlier programmes from external financing of Development Expenditure for the remainder of the financial year. The Supplementary Estimates have already been printed and tabled in Parliament for debate and approval. Mr. Speaker, Sir, as I have explained, we have received requests for expenditure and the major areas where we received requests were security and other operations. That was Kshs26 billion; allowances and salary shortfalls for the Ministry of Health - Kshs11.3 billion; electronic voter registration kits - Kshs9.2 billion; recruitment of teachers - Kshs6.2 billion; Local Government way leaves - Kshs5.9 billion; fertiliser for the long rains - Kshs4.7 billion; Lamu Port and Southern Sudan Ethiopian Corridor - Kshs1.8 billion; medical insurance scheme for civil servants - Kshs1.4 billion; Free"
}