Kenya’s economy has remained resilient despite the recent multiple and persistent shocks brought about by drought, elevated oil process, floods and increased geopolitical fragmentation that has hit the economy, the National Assembly Committee on Finance and National Planning has been told.
The Principal Secretary, Dr, Chris Kiptoo pointed out this, while making a presentation on behalf of the National Treasury, on the Budget Estimates for the Financial Year 2024/2025 to the Committee at Parliament Buildings.
He was responding to concerns raised by the Members of the Committee led by the Chairperson, Kimani Kuria (Molo), on the state of the economy following a spate of macroeconomic shocks intensified by the recent floods.
“I want to assure the Committee that the government has put up mitigation measures in place, to counter the effects of floods from the contingency fund as well as from donor funding”, the PS explained.
The Committee was meeting with the State Department of the National Treasury, the Kenya Trade Network Agency (Ken Trade) and the Office of the Controller of Budget to consider and deliberate on the revenues and expenditures contained in the draft Estimates for the Financial Year 2024/2025 and Supplementary Estimates for Financial Year 2023/2024.
The PS further told the Members that the Kenya shilling exchange rate had continued on a strong streak against major international currencies, adding that by end of April 2024, the shilling traded at Ksh133.3 against the dollar, compared to Ksh160.8 recorded at the end of January.
The Committee also heard that the total revenue collection amounted to Kshs1,855.7 billion against a target of Ksh 2,120.4 billion implying a performance rate of 87.3 percent.
With regard to the implementation status of the budget for the 2023/2024 Financial Year, the MPs were informed that a total Ksh111,261 million had been expended, amounting to an absorption level of 58.63 per cent against an expected absorption level of 75 per cent.
Members however noted that State Department had recorded a considerable deviation between the Financial Year 2024/2025 Budget Estimates and the approved 2024 Budget policy Statement Ceilings with the recurrent Budget Estimates recording a reduction from Ksh79,583.40 million to Ksh66,992.98 million.
The PS explained that the overall drop of Ksh20.608.66 million would greatly affect the delivery of critical programs and activities of the National Treasury.
Among the issues raised by the Hon. Members was the granted approval of additional expenditures under Article 223 of the Constitution to Kenya Revenue Authority, International Finance -PPP and Global Fund.
Members queried if Article 223 of the Constitution of Kenya is supposed to fund development or recurrent expenditure. The legislators expressed the opinion that it was time for Kenya to live within it budget, instead of remaining dependent on external borrowing.
The PS further informed the Committee that the National treasury had endeavoured to establish a single account so to avoid some of its agencies accruing pending bills, with funds lying in a fixed account.
The Director-General, Accounting Services and Quality Assurance in the National Treasury Mr. Bernard Ndung’u, assured the Members that the Integrated Financial Management System (IFMIS) still had its contracted placements and security in place.
The Committee further heard that the Kenya Revenue Authority had acquired scanners through lease under Public-Private Partnerships (PPP) to keep abreast with new technology.
The Chairman, Kuria Kimani, highlighted that the Pensions department should whip its staff to ensure that pensioners get their pension on time.
“PS, I wish to reiterate that this Committee is keen to have pensioners receive their dues at the same time with serving government employees”, Kimani held.
Additionally, Members emphasized on tightening loopholes on E-Citizen to ensure revenue generated through the portal serves the purpose it is meant for.The Principal Secretary requested the Committee to bring up more measures through legislation to ensure that most revenue gaps are filled.
Later in the afternoon, the Office of the Controller of Budget Office met the Committee to give a report of the 2024/2025 Financial Year Estimates of Revenue and Expenditures.
According to documents tabled during the meeting, the Office’s absorption rate for the 2023/2024 Financial Year stood at 61 per cent of an allocated Budget of Ksh698,769,689.
The Controller of Budget, FCPA Margaret Nyakang’o told the lawmakers that there was a significant deviation between the Ksh756,400,000.00 Budget Estimates for the Financial Year 2024/2025 and the 2024 Budget Policy Statements ceilings of Ksh 915,142,960.82.
The Committee pledged its support towards the office but advised the staff to come up with more measures to scale up the absorption rate of the budget especially in the counties, to guarantee value for monies disbursed.
The Kenya Trade Netwok Agency, a State corporation established to address the inefficiencies in cargo clearance processes and the trade logistics in Kenya, also made submissions to the Committee.
The Committee while promising to consider an enhanced from the Supplementary Estimates II to support the Agency, called on them to publicize their work so as to enlighten the public on their mandate.
Meanwhile, the Committee hosted a delegation from the Committee of Planning and Budget from the Parliament of the Republic of Zambia who are in the country to learn and bench mark on planning, budgeting process and on the vibrant conversation on the Finance Bill, 2024.
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