Government suppliers and public servants are set to feel the pinch of spending cuts that Treasury Cabinet Secretary Henry Rotich intends to present before Parliament next week in a bid to plug a gaping Sh84 billion budget hole.
President Uhuru Kenyatta’s Big Four projects, entertainment and travel for civil servants, and disbursements to counties are among the votes targeted for reduction after Kenya Revenue Authority (KRA) collections fell short of the Sh1.56 trillion projected a year ago by Sh84 billion.
The government intended to spend Sh2.2 trillion this financial year.
Treasury CS Henry Rotich told the Senate committee on Finance and Budget on Wednesday that the drawn-out election last year and persistent drought were to blame for a slow down in businesses that meant less was being generated in the form of tax.
He said the national government will tighten its belt by cutting down on travel, entertainment and other “unproductive” expenditures in the hope of saving Sh60 billion.
“If we have to slow down some development expenditure, so be it,” Mr Rotich said. “Something must give, and what is natural here is cutting expenditure.”
The far-reaching reviews in budgetary allocations will be contained in the Supplementary Budget II estimates expected in the National Assembly once it resumes its business early next week after a short recess.
The estimates could not be released on Wednesday because they were yet to be discussed by the Cabinet, sources said.
Among the projects likely to suffer are President Kenyatta’s legacy initiatives that target to increase the manufacturing sector’s share of Gross Domestic Product to 15 per cent by 2022, enhance food security, provide universal healthcare to all Kenyans, and build at least 500,000 affordable and decent housing by 2022.
Under these, extension of the Standard Gauge Railway and construction of mega dams in various parts of the country are likely to be among the casualties.
Should counties adopt similar measures, the government would slash Sh18 billion in disbursement to the devolved units, leaving them with Sh284 billion to run their activities.
That, however, is subject to Parliament approving an amendment to the Division of Revenue Bill of 2017.
“It would force us to borrow to get the Sh302 billion sharable revenue to counties. We can’t share what we have not collected,” Mr Rotich told the committee chaired by Mandera Senator Mohamed Mohamud.