Markets & Finance

Uganda beats Kenya in budget openness score

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The Treasury Building in Nairobi. Kenya shares with the public only half of the budgeting information that it is supposed to release to taxpayers. Photo/FILE

Kenya is ranked behind Uganda in Budget transparency in the East African region, reflecting a low level of availability of critical State planning information.

In a survey of 100 countries by London-based NGO Budget Partners International (BPI), Kenya scored 49 points out of a possible 100 in national Budget transparency against Uganda’s 65 points.

The scoring means that Kenya shares with the public only about half of the budgeting information that it is supposed to release to taxpayers.

A score of between 40 and 60 was considered moderate while that of 61 to 80, like Uganda’s 65, was termed “substantial.”

Tanzania scored 47 and Rwanda eight, showing their Budget transparency levels are even lower than Kenya’s. Burundi was not among the 100 countries surveyed.

The main problem with Kenya is that the Treasury does not disclose to the public the contents of its mid-term and end-year reviews and only uses the information internally.

The mid-year review, authored by the Treasury, is an overview of the effect of the Budget at mid-point of the financial year and discusses any changes in the economic assumptions that affect approved proposals. The full-year report shows the actual Budget execution against the one enacted by Parliament.

“A major failing of the Kenya Budget process is the fact that it is not programme-based. You see only line items. In a programme-based Budget, you can tell what the objectives are, the activities, the outputs and indicators for the various items proposed,” said Mr John Mutua, the Budget programme officer at the Institute of Economic Affairs (IEA).

Mr Mutua said Tuesday during the release of the scores in Nairobi that IEA would lobby the Treasury to start publishing a programme-based budget.

Many items are put in the national Budget estimates but it is often unclear as to what they represent.

In the current 2012-13 Budget estimates, for example, an item with an allocation of Sh4 billion is labelled “other domestic lending and on-lending” and only after an enquiry by the Business Daily last year did the Treasury reveal that Sh2.5 billion of the cash was intended for lending to Telkom Kenya.

READ: What Telkom must do to access Treasury’s Sh2.5bn

“Kenya’s score indicates that the government provides the public with only some information on the national government’s Budget and financial activities during the course of the Budget year. This makes it challenging for citizens to hold the government accountable for its management of the public’s money,” said a statement from BPI.

The government has potential to expand Budget transparency by introducing a number of short-term and medium-term measures, some of which can be achieved at no cost, said the BPI statement.

BPI recommended that Kenya adopts a functional classification of expenditure — disclosing specific projects to be financed — and revenue for at least two years beyond the Budget year and the year before.

Further, BPI suggested Kenya ought to give macroeconomic forecasts and assumptions used in developing the Budget.

BPI said the Budget should also disclose extra budgetary funds, inter-governmental transfers, quasi-fiscal activities, expenditure arrears, contingent and future liabilities, financial and nonfinancial assets, tax expenditures, earmarked revenues and secret items.

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