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National Treasury Publishes Ksh 3,036.5 bn Supplementary Budget 2020/21 FY 

Treasury CS Ukur Yatani to unveil Ksh3.6 trillion budget on Thursday

Treasury Cabinet Secretary Ukur Yattani

Kenya’s National Treasury has published its Supplementary Budget Estimates totalling Kshs 3,036.5 bn from Kshs 2,915.7 bn for the current financial year 2020-21.

The proposed budget increment is attributable to COVID-19 related expenditure and efforts by the government to spur economic activity. 

Key highlights in the supplementary budget include;

  1. The State Department for Early Learning and Basic Education has seen its budgetary allocation reduce by Kshs 1.3 bn to Kshs 99.5 bn from the earlier revised allocation of Kshs 100.8 bn. The 1.3% decline was on account of a 27.9% decrease in the allocation to Quality Assurance and Standards to Kshs 3.1 bn from the previously approved estimate of Kshs 4.3 bn, attributable to a 78.6% decrease in allocation for Curriculum Development to Kshs 0.3 bn from the earlier approved estimate of Kshs 1.4 bn,
  2. The Ministry of Health has seen its budgetary allocation decline to Kshs 111.5 bn from the earlier approved estimate of Kshs 111.7 bn. The 0.2% decline was on account of a 30.1% decline in allocation for Health Policy, Standards and Regulations to Kshs 27.4 bn from the previously approved estimate of Kshs 39.2 bn. This was due to the Health Policy, Planning and Financing department’s allocation declining by 43.9% to Kshs 12.9 bn from the earlier approved estimate of Kshs 23.0 bn,
  3. The State Department of ICT’s budget has increased by Kshs 1.7 bn to Kshs 21.7 bn, from Kshs 20.0 bn on account of a shortfall in personal emolument, ICT shared services, budget provision for the newly created office of Data Protection Commissioner and increased donor commitments. The creation of the Data Protection Commissioner office is partly attributable to the 29.5% increase in general administration planning and support services for the docket to Kshs 299.1 mn from Kshs 230.9 mn. The E-Government services docket also received a 4.2% increase to Kshs 2.5 bn from Kshs 2.4 bn on account of increased use of online services during the pandemic,
  4. The Ministry of Energy’s docket has seen its budget record the highest rise, increasing by Kshs 12.3 bn to Kshs 84.8 bn from the approved estimate of Kshs 72.5 bn on account of increased donor commitments and additional funding for flagship transmission lines. This is in line with the government’s last-mile connectivity initiative which aims to provide electrical connectivity to individuals in marginalized areas. It is key to note that the 17.0% increased allocation for the Ministry of Energy means that special approval will be needed for the expenditure adjustment in the docket since it is beyond the 10.0% threshold in accordance with the Public Finance Management Regulations. Allocation to power generation and power transmission and distribution are the notable gainers, increasing by 43.3% and 15.8% respectively to improve availability and access to electricity,
  5. In a bid to enhance food security, the State Department for Crop Development and Agricultural Research has seen its allocation increase by Kshs 7.8 bn to Kshs 49.6 bn from the approved estimate of Kshs 41.8 bn. The 18.7% increase, which is the highest percentage increase, is on account of the 29.4% increase in allocation to Crop Development and Management, coupled with the settlement of pending bills under the Maize Subsidy Programme, implementation of Emergency Locust Response Project, Pyrethrum Industry Recovery, Miraa Industry Revitalization Project and Embryo Transfer Project, which are aimed at increasing agricultural output and creating employment. The 18.7% increase in the agricultural docket will also need special approval since it exceeds the 10.0% threshold in accordance with the Public Finance Management Regulations, and,
  6. Consolidated fund services have seen a 4.4% increase to Kshs 1,037.7 bn from the earlier approved estimate of Kshs 1,028.0 bn. Interest and redemptions increased by Kshs 53.7 bn to Kshs 958.4 bn from the previously approved estimate of Kshs 904.7 bn while pension have seen a Kshs 8.1 bn decline to Kshs 111.1 bn from the earlier approved estimate of Kshs 119.2 bn. External interest payments declined by Kshs 31.6 bn to Kshs 340.0 bn from the earlier approved estimate of Kshs 308.4 bn, attributable to suspended interest payments for bilateral debt lenders from the Paris Club, which was partly attributable to the 1.0% decline in total interest payments to Kshs 458.7 bn from the earlier approved estimate of Kshs 463.1 bn. Total interest and redemption, however, recorded a 5.9% increase to Kshs 958.4 bn from an earlier approved estimate of Kshs 904.7 bn. Key to note, interest on external debt declined by 23.3% to Kshs 118.7 bn from Kshs 154.7 bn, with a notable decline of 28.4% in interest payments owed to Exim Bank of China to Kshs 21.4 bn from the earlier approved estimate of Kshs 29.9 bn.

Source: National Treasury & Cytonn Investments

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