Where will Uhuru get Sh1.2 trillion?

By DAVID OCHAMI and STEVE MKAWALECabinet has pre-empted an expected ruling by House Speaker Kenneth Marende due on Tuesday next week by clearing Finance Minister Uhuru Kenyatta to read the Budget statement on Wednesday.
The move to preserve the ceremonial monologue that is the reading came as Uhuru unveiled Kenya’s biggest ever Budget estimates totaling Sh1.2 trillion, but left everyone guessing as to how Treasury will finance the proposed expenditure, given the huge deficit in Government revenues and the steep rise in the cost of living for most Kenyans.
Speaker Marende is expected to give direction next Tuesday on whether the Deputy Prime Minister should be allowed to read the Budget in the House after claims he would be in breach of the Constitution.
A case is also before the courts seeking to block Uhuru, who is also the Deputy Prime Minister, from presenting the Budget statement.
Earlier this week, the House was split over the matter, with some MPs saying Uhuru should have observed the Constitutional requirement that he table Budget estimates two months before the end of the Government’s financial year, which is June 30.
Uhuru formally submitted the estimates to Parliament despite resistance from the MPs.
But Thursday’s statement from the Presidential Press Service said the Cabinet had cleared Uhuru to present the Budget.
The Cabinet was unanimous that the provisions relevant to the presentation of the Budget under the new Constitution will be strictly applicable after the next General Election, according to the PPS statement.
The estimates presented Thursday have seen allocations to infrastructure increase by Sh55.6 billion to a total of Sh221.4 billion as Uhuru seeks to present what he calls a "pro-poor, growth and sustainable development" that also targets more spending on education, health and security.
While releasing the Budget estimates to journalists at a press conference, the Finance Minister defended himself from accusations he flouted the new Constitution.
"We may not have lived to the strict letter of the Constitution with regard to the timelines, but more than other institutions, we at Treasury have nonetheless operated in the spirit of the new Constitution," said Uhuru.
The proposed Budget of Sh1.155 trillion for the 2011/2012 financial year is the largest in the country’s history.
"Irrespective of what Parliament decides on Tuesday, this is the Budget statement," said Uhuru after giving the highlights to journalists.
The statement appeared to emphasize that the reading of the Budget is not a priority, because the document was now in public domain.
Uhuru did not plead with Parliament to allow him read the statement, but said MPs would exercise their collective wisdom on the matter.
Parliament engaged in heated debate this week, where a group of MPs, led by ODM’s James Orengo, opposed plans by the Minister to read the Budget along with other East African countries on June 8, 2011.
The statement released by the minister Thursday was broad, indicating proposed allocations to various ministries and other priority areas, like the institutions created by the new Constitution and those on the way.
Should the minister not read the Budget statement, then for the first time, either Parliament or Kenyans will have to simplify the complex document themselves.
"The minister’s budget statement could only have simplified the document and structure how taxes will be generated on goods and tax relief, but that is not a priority now," said an officer from the Ministry of Finance.
Thursday, Uhuru maintained he did not breach the Constitution by not presenting it two months ago.
He lamented that he has been compelled to obey a section of the law he believes should not apply under the current Parliament, alleging that his critics are unconcerned by Kenya’s obligations to the East African Community EAC, and the impact the early publication of estimates will have on overall macro-economic stability.
"One aspect of the EAC treaty was to agree on a common Budget date, which is June 8," said Mr Kenyatta.
He submitted the estimates on March 31 to the Budget Committee of Parliament. On Tuesday evening the committee accused him of breaking the constitution and ordered him to submit them by next Tuesday.
Uhuru said it was up to Parliament to decide to allow him to read the Budget speech before it as he had promised to do next Wednesday.
"I stand guided by Parliament," he told journalists at a press conference in his Treasury office Thursday in an apparent climb-down and gesture to hostile MPs who accuse him of breaking article 221 of the new Constitution by not submitting the estimates in April.
"Whether it is read or not the Budget is already here. What normally happens in Parliament is a tradition, and is actually the last stage of the lengthy budget-making process, but in itself is not the budget — the budget is contained in the estimates, which are in front of us today," said Uhuru.
Transitional clauses"The speech simply highlights the key areas of focus that would be of interest to the public," he added.
Noting that Chapter 221 of the Constitution was one of the proposals of Treasury to the Committee of Experts (CoE) that drafted the new laws, Uhuru said his ministry had ensured public and parliamentary participation in the preparation of the budget.
He said preparation of the nation budget is a process that took between 10 and 11 months and reminded Kenyans that the budget cycle under the old Constitution and the promulgation of the new one have met each other halfway.
" Given the length of time it takes to formulate the budget, there probably should have been transitional clauses due to the fact that the budget date had been moved forward by two month," said Mr Kenyatta who was accompanied by the permanent Secretary Mr Joseph Kinyua and other senior officials in the ministry.
" Given the need to ensure macro-economic stability and smooth transition from the old Constitution to the new one, from purely practical perspective, it was not possible to present these estimates to parliament two months before the end of the financial year," said the minister.
He said that under the spirit of the new Constitution, Ministry of Finance officials fast-tracked the Budget-making process and recorded some achievements.