- Amid growing pressure to control public expenditure Parliamentary Budget Office (PBO) has advised the Kenya National Treasury to defer projects by one year.
- The recommendations by the MPs included limited spending on infrastructure by focussing on major road networks, reinforcing the work-from-home option for public servants, encouraging online platforms for meetings to cut costs on operations and merger of State Corporations to reduce government spending.
Amid growing pressure to control public expenditure Parliamentary Budget Office (PBO) has advised the Kenya National Treasury to defer projects by one year. Cabinet Secretary for the National Treasury, Ukur Yatani, is expected to table a spending plan for Ksh3 trillion ($27.52 billion) in the 2021/22 fiscal year.
The recommendations by the MPs included limited spending on infrastructure by focussing on major road networks, reinforcing the work-from-home option for public servants, encouraging online platforms for meetings to cut costs on operations, and merger of State Corporations to reduce government spending. The MPs have also proposed extending duty relief and exemptions schemes on imported intermediate inputs for exporting firms to boost exports. They also called for closer scrutiny and parliamentary approval of public-private partnerships.
These recommendations were presented through a report called “Evading recessionary pressure under a mounting debt burden: Budget Options for 2021/2022 and the Medium Term”. The report, pointed out that Kenya’s debt repayments eats up a large chunk of tax revenues, which could have otherwise been used to stimulate economic recovery. Kenya’s debt repayment expenditure, estimated at $8.48 billion in the current (2020/21) fiscal year is expected to hit $9.35 billion by the end of the next financial year. (2021/2022).
With low growth, low revenues, high expenditure, and high debt service pressure the economic growth contracted to 0.6 percent last year, down from 5.4 per cent in 2019. It is projected to grow by 1.3 percent in 2021.
