Finance minister Uhuru Kenyatta presents the Budget at Parliament Old Chambers on June 10,2010. A total of Sh9.5bn has been set aside for the implementation of the constitution, according to the budget policy statement tabled in the House March 23, 2011. FILE
By ALPHONCE SHIUNDU ashiundu@ke.nationmedia.com
Posted Wednesday, March 23 2011 at 11:31
Posted Wednesday, March 23 2011 at 11:31
The Treasury has set aside Sh9.5 billion for the implementation of the new Constitution and for initial preparations for the next General Election to be held next year.
This information is contained in the Budget Policy Statement –a three-year forecast of government spending—that was tabled in Parliament Thursday by Finance minister Uhuru Kenyatta.
The money will be included in this year’s “revised” Budget through the Supplementary Budget and in next year’s Budget.
But as it put aside the money, the Treasury has its eyes on donors to help the country in rolling out the new Constitution, more so when it comes to devolution and the new structures in the new Constitution.
“We expect continued support from development partners in the implementation of the new Constitution,” it notes in the paper. That means that the government will have to prioritise its spending, while at the same time focusing on crucial social needs so that it is able to “live within its means”.
The document has revealed that the Treasury has not set aside any money for the county governments in the next Budget, meaning the onus will be on the central government to build infrastructure in each of the 47 counties.
Top of the list is the construction of High Courts in 32 counties where none exists and the refurbishment of the old Chambers at Parliament to accommodate the Senate. New offices for Parliament are also envisaged and so is the construction of county assemblies around the country.
The number of MPs in the next Parliament will be 418 MPs up from 224 as is the case now. Sh8.1 billion has been set aside for this fiscal year.
The Treasury has also asked the International Monetary Fund to give “sufficient room” to the implementation of the new Constitution. The IMF has approved a Sh40 billion credit to Kenya, of which Sh8 billion was released to the Treasury in January this year, while the remainder will be released annually for the next three years.
There’s also an express warning to politicians to tone down their grandstanding because that threatens investor confidence, which the Treasury is banking on, in its effort to guarantee an upward trend to the country’s growth.
“Continued investor confidence in Kenya’s economy hinges on the smooth implementation of the Constitution which is expected to address the longstanding social and political problems that have held back our growth potential. Current political tensions do not augur well in this regard,” the Budget Policy Statement reads.
The current debate on the post election violence cases has has split the Cabinet, with one side urging the International Criminal Court to defer the process to let Kenya handle the suspects, while another side has urged the ICC to go ahead with the prosecutions.
The policy statement paints a rosy picture of the economy in the next three years, with this year’s growth projected at 5.7 per cent. Next year, the economy will grow by 6.1 per cent, and this is expected to rise to 6.8 per cent in 2014.
New tax laws are expected in Parliament –possibly through the Finance Bill or through the Supplementary Appropriations Bill—whose impact, it is expected will be seen in revenue allocation.
Total revenues, including appropriation in aid, are thus projected to be Sh774.4 billion in the next budget. The expenditure is projected at Sh975.8 billion.
The weather is the only feature, so far, that’s likely to put brakes on the economic growth.
“As the global economy recovers and with the successful implementation of the new Constitution, prospects for the Kenyan economy are bright, barring any possibility of adverse weather conditions,” the Treasury noted in its report.
Also, the Treasury noted that the oil crisis as a result of the political uprisings in North Africa and the Middle East, plus the attendant rising in inflation and the weakening of the Kenyan shilling as some of the big issues that could slow down economic growth.
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