By George Githinji
The government came up with an ambitious budget in the 2015/16 financial year of sh2.234 trillion to finance its programmes and activities.
Of the two trillion shillings, sh784.2 billion will finance the recurrent expenditure of government ministries whereas sh721.3 billion will be used on capital expenditure, also known as the development expenditure.
The government will also spend sh287 billion for county transfers (money allocated to county governments from the national government), sh27.3 billion as parliamentary allocation and sh7.2 billion for the Judiciary. Sh441.5 billion will go towards the Consolidated Fund Services (CFS).
The Consolidated Fund (Article 206) is a constitutionally established fund where all money raised or received by or on behalf of the national government is allocated, other than the money that is excluded from the fund by an Act of Parliament or retained under an Act of Parliament by a state organ to finance its costs.
Key priority areas for 2015/2016
The theme for this year’s budget is “Enhancing economic transformation for a shared prosperity.”
The key priority areas that the government has identified to spend money on in 2015/16 are security, education, and health, social safety nets, infrastructure, agriculture, tourism, county governments and the Constituency Development Fund (CDF).
The government will invest Ksh241.8 billion in security for the military, police and prisons service. In education, it has allocated sh336.3 billion for programmes that include free primary and secondary education, the school feeding programme, tertiary education, the Teachers Service Commission and the laptop programme.
It also allocates sh59.2 billion for preventive and curative health that includes free maternity health and leasing of medical equipment. Under social safety nets, the government intends to spend sh31.5 billion on social protection, culture and recreation services.
The government intends to spend sh404.7 billion on infrastructure as an area of priority. The programmes under this sector include energy, roads, the Standard Gauge Railway (SGR) and airports. To develop agriculture, it has allocated sh79.7 billion for the ongoing irrigation projects, launch of fisheries and livestock development.
The tourism sector gets sh5.2 billion for tourism recovery and sh287 billion is set aside as the shareable revenue for all the 47 county governments, that is divided equitably among them. In addition, sh35.2 billion is set aside as the Constituency Development Fund (CDF) shareable to all the 290 constituencies equitably.
Overall Budget Financing
To finance its sh2.234 trillion budget for the financial year 2015/16, the government expects to collect sh1.358 trillion in the same financial year. The sources of the local revenue are sh310.3 billion in Value Added Tax (V.A.T), sh142.1 billion in excise duty, sh82.2 billion in import duty, sh103.1 billion from ministerial and departmental fees, sh97 billion from other sources. The bulk of the local revenue will come from income tax, which amounts to sh623.2 billion.
In addition, the government projects to receive sh73.4 billion in form of grants, sh283.7 billion in foreign borrowing and sh222.5 billion in domestic borrowing. The government has a domestic debt roll over of sh174.9 billion and it expects to receive sh121.5 billion from other sources.
The writer George Githinji comments on political issues in Kenya – blogs at Politics Kenya