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{
    "id": 553489,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/553489/?format=api",
    "text_counter": 43,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Hon. Speaker, a credible Budget should cater not just for the needs of the present generation, but those of the future generations as well. Increasing expenditure without a matching increase in revenues means that the country is forced to borrow to meet its increasing expenditure demands. Indeed, my Committee wishes to point out that despite commitments by the national Government to reduce the deficit levels over the medium term, this appears to be a moving target as the figures are continuously adjusted upwards. This continuous flouting of set targets compromises the predictability of the Budget and the country’s deficit policy is diluted. My Committee notes that the debt repayments on both redemptions and interest area are also rising. There is, therefore, need to regularly evaluate debt sustainability of increased foreign debt, especially its effect on the domestic interest rate movements, exchange rate volatility and the future financial sector stability. My Committee also notes with concern that despite the national Government’s commitment to re-orient expenditures towards development, the Budget is still geared towards recurrent type spending as opposed to development as capital expenditures remain significantly lower than Recurrent Expenditure. There is also fairly low absorption rate although I am happy to say that, that situation is improving. Moreover, a review of most expenditure items in the Budget depicts either maintenance of historical expenditures or increment in their allocations without clarity on actual performance. It appears that the tenets of programme-based budgeting are yet to be clearly understood as the Budget remains incremental in nature. This is a matter we have raised many times and we are assured that overtime, there is going to be improvement. We will continue to monitor that situation. With respect to capital spending, my Committee observed that the national Government is currently undertaking just over 1,100 capital projects with a total cost of Kshs4.2 trillion. By the end of Financial Year 2014/2015, it is estimated that the Government will have spent about Kshs1.6 trillion, indicating that the Kshs2.6 trillion is required to finalize all the on-going projects. Most of the projects have a timeline period of 16 to 18 months. A review of the Budget Estimates for 2015/2016 and the Medium Term Expenditure Framework indicates that the Government has allocated a total of Kshs2.1 trillion for capital expenditure. This indicates that not all ongoing capital projects will have been completed by the year 2017/2018. It is the opinion of my Committee that the Government should increase its allocations for capital projects to ensure completion of the ongoing projects within the next three years. Further, the Government should consider a freeze on introduction of any new capital projects until all ongoing projects have been completed, unless it is absolutely necessary to do so. The Budget Policy Statement (BPS) 2015 requires that ongoing projects should be prioritized in the budget for any Ministry. In previous engagements between the National Assembly and the Ministries, funding for a high number of pending bills is typically requested within a financial year through supplementary budgets. This shows that the specific Ministries did not prioritise their expenditures to accommodate any pending bills on the commencement of the fiscal year. Therefore, there is need for a proper framework of settling pending bills to ensure that they are not carried to supplementary budgets. The Treasury has allocated Kshs5 billion for civil contingency reserves. It is also noted that the State Department for Devolution has allocated an additional Kshs1 billion for civil contingencies under its budget. A review of the Estimates does not present any output for the allocation under the State Department for Devolution. The need for allocation of funds for a similar function in two separate spending agencies raises concern of duplication of functions."
}