Fuel subsidy tops Treasury Sh64bn extra budget


The National Treasury has asked the National Assembly to approve an additional Sh64 billion, to stabilise fuel prices.

In what reveals the extent to which taxpayers are shouldering the burden of meeting the extra cost of fuel, Treasury has set aside Sh37.8 billion of which it has already spent Sh15.8 billion.

Treasury is seeking approval of Sh29 billion expenditures which it has spent under Article 223 of the constitution–the law that allows expenditure before approval by MPs.

If approved, the budget for the financial year 2021-22 will increase by Sh204 billion overall, the last supplementary estimates having been approved barely two months ago.

Treasury Cabinet Secretary Ukur Yatani said the additional funds would cater for security-related expenditure, drought interventions and adjustments to development partners’ funding.

He told MPs in the request that the implementation of the current budget continues to face various challenges and set the stage for the need for extra cash.

“These include drought, fuel shortage and rising prices, effects of the Ukraine-Russia war among others,” Yatani said.

“Increased demand for additional priority expenditures poses a challenge to the implementation of the ongoing projects.” 

Yatani has asked MPs for special approval of the estimates, the same having exceeded the 10 per cent threshold set for adjustment of any vote-head.

“We are requesting for the special approval of the expenditures adjustments which are beyond the 10 per cent threshold by Regulation 40 (9) of the Public Finance Management Regulations, 2015,” the CS said.

Roads have been allocated Sh24 billion in what reveals the bid by President Uhuru Kenyatta to complete the numerous road projects his administration initiated.

“The addition is on account of provision of government funding for the completion of various ongoing roads and development partner projects,” the Treasury said.

To cater to the fuel price stabilisation, the Petroleum budget will increase by Sh37 billion whereas Sh10.4 billion more has been provided for rail transport.

The Office of the President is among the greatest gainers in the adjusted budget with an extra Sh4.4 billion of which Sh3.3 billion would go towards State House operations and maintenance.

Nairobi Metropolitan Services will get Sh1 billion more in the adjusted budget with an additional Sh613 million to the Devolution Ministry which they spent in the just concluded Africities Summit.

An extra Sh1.7 billion would go to the Defence ministry, Sh1.2 billion for university education, Sh1.6 billion for primary education, Sh1.5 billion for drought relief and Sh1.8 billion to meet KWS salary shortfalls.

The National Intelligence Service has been provided with an additional Sh1.3 billion, ostensibly for security monitoring ahead of the August elections.

Teachers Service Commission has been provided Sh2.2 billion more in the reviewed estimates which now push the 2021-22 allocations to Sh2.146 trillion.

On expenditure already executed, Treasury wants MPs to approve Sh94 million spent on Cabinet affairs, Sh1.4 billion spent by the State House on operations and maintenance and Sh860 million that went to Foreign Affairs for the same.

Approvals have been sought for the Infrastructure department’s Sh8 billion spend, Sh1 billion that went to the Inland Container Depot at Longonot, and Sh1 billion spent on fertiliser subsidy.

Yatani wants the National Assembly to approve the Sh260 million that was spent on President Mwai Kibaki’s state burial.

But to meet the additional funding, several ministries have suffered brutal budget cuts that would see them rationalise their spending in the current year.

The crops department suffered the biggest cut at Sh4.8 billion, Health ministry Sh3.7 billion, marine transport at Sh2.24 billion and Sh2.6 billion in respect of the housing budget.

“The reduction is on account of budget rationalisation due to low absorption of development partners funded projects,” Yatani said.

The energy budget has been cut by Sh3.8 billion, Youth Affairs by Sh1.34 billion, and the Prisons department by Sh800 million less.

About two months ago, MPs voted to approve an extra Sh139 billion in additional funding to the Jubilee administration in its final year.

The President’s office got Sh1.9 billion which included additional amounts for state house affairs, the Deputy President’s office, and the Cabinet.

MPs approved additional Sh3.2 billion to the Interior ministry and Sh3.45 billion to the National Intelligence Service.

IEBC got Sh8.7 billion while a further Sh6.96 billion went to the Teachers Service Commission.

MPs provided Sh6.7 billion for fuel stabilisation and Sh4.9 billion for the National Government Constituency Development Fund and Sh300 million more to the Auditor General’s office.


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