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Economy

Treasury sets aside Sh6.2bn for emergencies in next fiscal year

Communities are grappling with effects of drought. PHOTO | FILE
Communities are grappling with effects of drought. PHOTO | FILE 

The Treasury has set aside Sh6.2 billion to deal with emergencies in the year starting July 1, the latest indication that adverse weather and other disasters are expected to feature in national budget for months to come.

The 2017/18 allocation is, however, lower than the Sh7.2 billion set aside for the purpose in the current financial year.

Last week, the Treasury was forced to re-organise its budget to raise Sh16 billion, or an average of Sh3.2 billion per month, to finance emergency operations as communities grapple with effects of drought.

As for the next fiscal year, the State has allocated Sh5 billion for contingencies and a further Sh1.2 billion for strategic grain reserve.

The money is contained in the Division of Revenue Bill, 2017, which has been published by the National Assembly Budget and Appropriations Committee.

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The Bill provides for the equitable division of revenue raised nationally among national and county levels of government as required by Article 218 of the Constitution in order to facilitate the proper functioning of the governments and ensure continuity of services.

“Included in the equitable share of revenue for the national government is an allocation of Sh5 billion for the capital of emergencies fund. “This fund will be used to meet demands arising from urgent and unforeseen needs in all counties that suffer from calamities in the manner contemplated in section 21 of the Public Finance Management Act, 2015,” the Bill says in its explanatory memorandum.

Section 21 of the PFM Act allows the Treasury cabinet secretary to make advances from the Contingencies Fund if he is satisfied that an urgent and unforeseen need for expenditure has arisen for which there is no specific legislative authority.

The PFM Act 2012 and the PFM (County Government) Regulations 2015 Act require the 47 county governments to set up county emergency funds.

“County governments are expected to set aside at least two per cent as part of their allocation for this purpose,” said the National Assembly Budget and Appropriations Committee chairman Mutava Musyimi.

Mr Musyimi said after taking into account all the other factors contemplated in Article 203 (1) of the Constitution including the needs of county governments.

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