Budget shortfall stalls completion of CDF projects
Butula MP Alfred Odhiambo (right) and his constituents read a CDF report for the financial Year 2006/07 and 2010/11 from a taxpayers’ association. MPs now want more money to complete projects. Photo/FILE
What you need to know:
The decision to borrow from domestic sources follows a budgetary shortfall of Sh43 billion which the Treasury targeted to collect in the first quota of the year.
The minister also revealed that Sh2 billion had been allocated to Kenya Revenue Authority (KRA) to fight counterfeit exercise duty stamp and eradicate all revenue leakage loopholes.
Planning and National Development minister Wycliffe Oparanya lifted a decision to freeze all CDF accounts by January 15, 2013 until after the elections.
The Treasury will borrow Sh10.8 billion from local commercial lending institutions to meet the shortfall needed to finance Constituency Development Funds (CDF) projects before Parliament is dissolved.
The decision to borrow from domestic sources follows a budgetary shortfall of Sh43 billion which the Treasury targeted to collect in the first quota of the year.
Finance minister Njeru Githae said the Cabinet had granted him approval to seek the funds locally to enable outgoing MPs conclude pending projects ahead of the March 4, 2013 General Election.
The minister also revealed that Sh2 billion had been allocated to Kenya Revenue Authority (KRA) to fight counterfeit exercise duty stamp and eradicate all revenue leakage loopholes.
The revelations follow sustained pressure from MPs on the Treasury to release the balance of the Sh21.7 billion, being 0.5 per cent of the total government revenue set aside for CDF.
MPs had expressed concern at the failure on the part of the Treasury to release the statutory funding to CDF board for onward disbursement to constituencies before the House is prorogued on January 14, 2013.
Mr Githae said the Government had as December 17, 2012 released a total of Sh10 billion to constituencies.
“We released Sh7 billion in July, Sh1.5 billion, in September, Sh1.5 billion in November and Sh800 million this month. This represent 50 per cent of CDF allocations meaning that according to Constituency Development Funds Act 2003 we are not in arrears on the first quota,” said Mr Githae.
The minister said the full amount was expected to be released before end of September but due to budget shortfall, the disbursement was not possible.
“We have a budget short fall of Sh43 billion and we are not able to meet our obligation to disburse funds to CDF unless we resort to local borrowing,’’ Mr Githae said.
The minister informed MPs that the inability to meet the commitment to release money for CDF was caused by the increased demands for salaries by teachers, lecturers and doctors who went on nationwide strike in the month of October.
“This led us to direct the little collections to meet the demands of the striking teachers which made it difficult for us to release CDF money,” he said.
He promised to release the money to the constituencies before the end of the month to allow MPs to conclude their projects.
Planning and National Development minister Wycliffe Oparanya lifted a decision to freeze all CDF accounts by January 15, 2013 until after the elections.
He said the money once released will flow until the new MPs are elected into office. He, however, said constituency accounts managers will be in charge of the funds administration and will be accountable for any loss.
Ekwee Ethuro, who chairs the CDF committee, Elias Mbau who is in charge of the budget committee and MPs Raphael Letimalo, Benjamin Langat and Martin Ogindo accused the minister of underfunding KRA.
The MPs demanded to know what would happen if the accounts are frozen a week after the release of the funds.
