The Controller of Budget has raised red flags over three areas likely to slow down the implementation of 2023/4 budget.
- During the first six months of Financial Year 2023/24, the National Treasury released a total of Kshs 1.23 trillion to the Ministries and County Governments.
- This represented 37.0 per cent of the revised annual net estimates.
- This was below the projected target of 50 per cent of the annual allocations by the end of the first six months.
In the first six months of the financial year 2023/4, the office says delay in the disbursement of funds to both ministries and county governments, high public debt that exceeds legal limit and overdrawn budget lines has hit budget implementation.
As of 31st December 2023, the public debt stock stood at Kshs 11.14 trillion, comprising of Kshs 6.09 trillion (54.7 per cent) due to external lenders and Kshs 5.05 trillion (45.3 per cent) due to domestic lenders. The public debt stock has increased by 8.4 per cent from Kshs 10.28 trillion as of June 30th, 2023, to Kshs 11.14 trillion as of December 31st, 2023.
External debt grew fastest at 11.8 per cent while domestic debt recorded 4.5 per cent growth. A large proportion of the growth in external debt is attributed to the depreciation of the Kenya Shilling against major world currencies.
Overdrawn Budget Lines
In the half-year budget implementation report, Office of the Controller of Budget notes that while the budget revision was necessary, it did not fully consider the incurred expenditure on some budget lines. Some expenditures were more than the budgeted amounts, resulting in overdrawn budget lines.
To regularise the overdrawn budget lines, the Controller of Budget recommends for Ministries, Departments and Agencies (MDAs) to liaise with the National Treasury to ensure the issue is fixed in the next Supplementary Budget.
According to the office, in the first half of Financial Year 2023/24, the Government rationalized budgetary allocations to reduce the budget for non-core activities and free resources for the implementation of government-priority activities.
- In the FY 2023/24, the National Treasury projected to raise Kshs 4.28 trillion to finance the budget.
- As of 31st December 2023, receipts into Consolidated Fund were Kshs 1.44 trillion recording 33.7 per cent of the annual target against the 50 per cent target by the first half.
- “Shortfall in receipts into the Consolidated Fund is responsible for the delay in release of funds,” the Controller of Budget notes.
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