Budget hands State firms Sh558bn

Treasury secretary Henry Rotich. State corporations were allocated Sh558 billion in the next budget without an explanation by the Treasury how to spend the cash. PHOTO | FILE |  NATION MEDIA GROUP

In Summary

• Attorney-General Githu Muigai, however, said the Bill was approved by Cabinet and it could have been submitted to the National Assembly.
• Earlier, Commission for the Implementation of the Constitution boss Charles Nyachae said his team had cleared the Bill and handed it over to the AG.
• The blueprint for the reforms proposed a reduction of parastatals from over 250 to less than 45.

By JOHN NGIRACHU
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By BERNARD NAMUNANE
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State corporations were allocated Sh558 billion in the next budget without an explanation by the Treasury how to spend the cash.

This comes even as parastatal reforms appear to have stalled, with the Government Owned Entities Bill stuck somewhere between Cabinet and Parliament.

Attorney-General Githu Muigai, however, said the Bill was approved by Cabinet and it could have been submitted to the National Assembly.

A check on the National Assembly’s website proved otherwise.

Earlier, Commission for the Implementation of the Constitution boss Charles Nyachae said his team had cleared the Bill and handed it over to the AG.

“The Bill left here some time back and I believe it must be somewhere between the AG and Cabinet. And that is assuming there were no changes,” he said.

The Parliamentary Budget Office raised the alarm on the parastatals cash in a report to MPs, saying the Treasury has constantly failed to submit a breakdown of the money allocated to the firms, some of which are reeling under debt and not contributing to the economy.

Parastatals are usually funded through their parent ministries, departments and agencies (MDAs), which were allocated Sh1.4 trillion in the estimates submitted to the National Assembly on April 30. The parastatals’ allocation of Sh558 billion takes 32 per cent of this.

“Given that the state corporations have not been provided for, it means 32 per cent of MDA expenditure is not available for scrutiny,” the budget office says in its report, Unpacking the Estimates of Revenue and Expenditure presented to the Budget and Appropriations Committee.

The budget team says over the last two years, Parliament has been recommending that budgetary transfers to the corporations be broken down.
These observations are likely to return focus to the Jubilee Coalition’s stalled plans to reform parastatals by merging some and dismantling others.

The blueprint for the reforms proposed a reduction of parastatals from over 250 to less than 45.

But the government has signalled the status quo will remain for a while with the recent appointment of 302 parastatal appointments.