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Opinion & Analysis

Opaque mini-budgets are prone to abuse

National Treasury building in Nairobi. FILE PHOTO | NMG
National Treasury building in Nairobi. FILE PHOTO | NMG 

I have scanned through the supplementary budget that was tabled in the National Assembly by the National Treasury. It got me reflecting on how things don’t change in this country.

In all the years I have been reporting and writing stories about national budget outturns, I cannot remember a single time when a financial year ended without major reallocations to the original budget.

In most cases, deviations between the original budget and the final outturn will be excessive. What this means is that whenever you hear and see them going to the top of the roof to announce how they have allocated billions of shillings to this or that project, it means nothing.

For instance, when during the budget in June Parliament announces that it has allocated billions to Lapsset- it does not amount to an assurance that the money will be disbursed to the project promptly and within that financial year.

There is also a chance that the whole amount may not be released to you at all because the supplementary budget system allows the Treasury secretary and his principal secretary to reallocate the money within the financial year.

All they need to do is to seek retrospective approval during the supplementary budget process.

The tragedy is that our parliament traditionally does not sufficiently interrogate the supplementary budget to detect massive alterations made by the bureaucrats in the middle of the financial year.

I am not saying that changes and variations introduced in the middle of the financial year are all the time without justification.

Indeed, part of it has to do with poor budgeting, the consequence of unrealistic resource and expenditure estimates.

And when contingencies arise, like has happened right in the current circumstances where the Treasury has to provide resources to the Independent Electoral and Boundaries Commission (IEBC) for the repeat presidential election, deviations from the original budgetary provisions are unavoidable.

What I have never cracked in all the years I have been reporting about supplementary budgets is the link with security budgets.

The primary justification for a supplementary budget may be a food crisis. But when the mini- budget is eventually presented to Parliament, disproportionately larger allocations will go to security departments.

But as we all know, budgets for security departments are very opaque making them candidates for hiding slush funds. Usually security budgets are one lump sum allocations with no break-down of where the money is going to be spent.

It does not surprise that despite the fact that the primary justification for the mini-budget currently before Parliament is the forthcoming repeat election, the budgets for the National Intelligence Service, the Department of Defence and the National Police Service have been given new and large allocations.

In retrospect, the budget reforms yjat we have been implementing over the years did not yield much apart from introducing grotesque terms such as ‘‘resource envelopes’’, ‘‘incremental budgeting’’ and ‘‘Medium Term Expenditure Frameworks (MTEF)’’.

For example, the whole idea of MTEF was about spending in accordance with priorities identified during budget hearings. It has not worked.

Year after year, agriculture is identified during budget hearings as a priority. However, the biggest resource envelope will always go to security.

Budget reforms will not help you much when your main problem is resource constraints. You cannot go very far in circumstances where the National Treasury is overstretched all the time, trying to pay for pending bills, wages and debt service-keeping the system limping along.

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