The Parliamentary Budget Committee has warned that approving new budget estimates would lead to financing gaps and therefore additional borrowing.
According to the committee, Treasury’s proposal for the KSh 80.1 billion supplementary is counterintuitive since revenue shortfalls call for cuts. Besides, the committee is concerned with the budget’s additional programs contrary to Public Finance Management regulations.
The committee will sit down with Treasury to tomorrow pass their concerns officially.
“It is clear that the revenue projections are still unrealistic and that the proceeds from State-Owned Enterprises (SOEs) of KSh78 billion are not likely to finance the supplementary increases. Therefore, if the supplementary budget passes, this financing gap will have to be met from additional borrowing…” Reads a report from the parliament’s budget office.
The committee estimates that approving the supplementary budget would add a financing gap of KSh 146.3 billion. The move stretches Kenya’s borrowing as June’s budget has a deficit of Ksh 640 billion, financed through debt.
Additionally, parliament is wary of Treasury’s proposal to impose cuts on both Judiciary and the Parliamentary service commission. The judiciary will suffer KSh 3 billion in cuts whereas the PSC will take a hit of KS 6 billion.
Finally, the parliamentary budget committee believes that the constant revisions undermine the credibility of the budget. Therefore, the MPs call for a tool to evaluate priorities under the Big Four agenda which is yet to be adhered to. Besides, the committee a progress report on UHC roll out in four pilot counties.