Ichungw'ah faults Treasury over supplementary budgets

National Assembly Majority Leader Kimani Ichungwa has faulted the Treasury over continuous ‘back-tracking’ of the government agenda through introduction of many supplementary budgets to Parliament.

Ichung’wa who spoke on Wednesday during the consideration of the supplementary budget II for the 2023/2024 financial year, which reduced government expenditure by Sh24.2 billion, blamed the Treasury for the shift in goal posts by government occasioned by the budget cuts.

The Kikuyu MP was categorical that it was not in order for the Treasury Cabinet Secretary Njuguna Ndung'u to keep revising the country’s expenditure plan, saying that it exposes the government to ‘fiscal indiscipline.’

"The recurrent practice of revising budgets multiple times within a single financial year is not conducive to a sound fiscal management regime. It reflects a lack of preparedness in our budgeting processes and introduces uncertainties in resource allocation for crucial programs,” said Ichungw’a.

Notably, the Supplementary budget II increased the 2023/2024 recurrent budget by Sh51.11 billion and reduced the development budget by Sh75.3 billion.

The Majority Leader consequently appealed to the Treasury to restrict the supplementary budget to one per financial year to avoid disrupting the government agenda.

He explained that through multiple budget revisions, “budgetary predictability” and “operational certainty” was not guaranteed within government institutions and this, he said, had a ripple effect on development programmes initiated by the agencies.

"I want to re-emphasize the need for prudent use of public resources. This House has called on the National Treasury to limit supplementary budgets to at least one in a financial year so that whatever you plan from your Budget Policy Statement (BPS) right to the annual estimates, you can only revise it once," observed Ichung’wah.

At the same time, the Budget and Appropriations Committee (BAC) also poked holes into the revised expenditure by the Treasury, and faulted the introduction of expenditure on non-core areas.

“The committee noted that there is a tendency to revise recurrent expenditure upwards during the supplementary budget process despite the national government’s commitment to a fiscal consolidation path. Most recurrent spending does not typically constitute an emergency and can be deferred to the following financial year,” read a report by the Kiharu MP Ndindi Nyoro-led committee.

The House team further faulted the Treasury for going against the Constitution, noting that Article 223 does not allow the introduction of new projects in supplementary budgets.

It singled out the Sh2 billion Konza and Smart Cty facility allocation, Sh2 billion for the Kenya Green Resilient project Expansion, the Sh732 million installation and commissioning of Eldoret Napal fibre optic, Sh700 million horizontal infrastructure development, and a further Sh400 million digital economy acceleration project.

Additionally, it flagged Sh100 million allocation for consultative services for South Lokichar Oil Field Development plan as part of the projects unlawfully added into the budget by the Treasury.

The Parliamentary Budget Office has projected a miss in revenue targets by governments amounting to approximately Sh350 billion in the current financial year. Consequently, the National Treasury has revised the budget from Sh4.2 trillion as approved by Parliament to Sh3.9 trillion.