Treasury Cabinet Secretary Henry Rotich, who will present budget
estimates in Parliament soon. PHOTO | SALATON NJAU | NATION MEDIA GROUP
The Treasury is expected to table national budget estimates this
week, amid concern over the soaring public debt, which has more than
tripled in the past three years.
Budgets watchers will
be waiting to see how the government will finance its spending, given
that last year’s Sh2.3 trillion projections, tabled by Cabinet Secretary
Henry Rotich, were largely funded through concessionary loans from
China and the international market.
The estimates,
usually tabled in May, will be shared with MPs early to ensure the
assessment is completed before the House goes for a recess in June.
The change was made to provide room for campaigns ahead of the August 8 elections.
National
Assembly Clerk Michael Sialai Rotich said the estimates are expected on
Tuesday but added that no indication had been given.
Nevertheless, they will certainly be tabled this week once the Cabinet approves.
In 2015 the the public debt stood at Sh1.3 trillion and it is currently well over Sh3 trillion.
There
have been claims that the government is planning to float another
international bond amid an appetite for high-capital infrastructure
projects that will further balloon the debt.
When
Mr Rotich submitted the Budget Policy Statement to Parliament in
December last year, parliamentary budget experts warned that if MPs
adopt the business-as-usual approach and approve the policy statement as
it is, public debt will continue to rise and issues routinely raised by
auditors will not be tackled.
In an analysis submitted
to the Senate’s Finance Committee, the Parliamentary Budget Office
(PBO) pointed out missing information and said the next spending plan
will not be policy-driven.
REDUCING COUNTIES' FUNDS
Planning
and economic experts, who advise legislators as they scrutinise the
budget, said the policy statement appears to have been submitted merely
to fulfil the requirements of the law.
Regarding the
soaring debt, the experts advised MPs to adjust the deficit to a
manageable level and enable the country to align its spending with the
realities of the time.
“The office has noted through
review of past budget processes that at least 10 per cent of all
resources are wasted through wrong procurement, exaggerated prices among
other vices,” the PBO said.
It said that based on
this, it should be possible to reduce the budgets for each arm of
government and each sector without causing harm.
MPs
have also attracted criticism for slashing allocations to counties in
the shareable revenue with the government from Sh334.9 billion to Sh291
billion, defying warnings that the amount did not account for inflation,
which stands at 6.5 per cent.
The Treasury had pointed out that the total ordinary revenue is Sh1.549 trillion while the shareable income is Sh1.538 trillion.
But even this is not credible as the national government has never been able to meet the target for the shareable revenue.
In
the Budget Policy statement, the Treasury had said that the amount of
money to be shared by the 47 counties will increase by 6.7 per cent,
which the PBO said does not consider the current inflation rate.
“With
the current inflation at about 6.5 per cent, the increment for the
counties will only cover the changes in prices and thus no benefit of
the increased sharable revenue will be enjoyed by the county
governments,” the PBO added.
Unlike in previous Budget
Policy Statements, the Treasury also failed to disclose its specific
targets to be met in the 2017/18 financial year.
“For
example, there are no details on measures that will be taken to
strengthen revenue collection, eliminate unproductive expenditures,
stabilize the Kenyan currency…which means the 2017/18 budget will not be
policy-driven,” it added.
NO FEEDBACK
While Treasury had said that the plan to increase housing units for the police would be expanded to the Kenya Defence Forces and the Prisons Department by 2016, it did not inform MPs of progress on this target.
While Treasury had said that the plan to increase housing units for the police would be expanded to the Kenya Defence Forces and the Prisons Department by 2016, it did not inform MPs of progress on this target.
There was also nothing on the planned establishment of a fund to finance the development of an integrated security system.
The
Treasury was also mum about the development of guidelines for the
installation of surveillance cameras in all urban buildings in
collaboration with county governments.
On the
infrastructure front, the Treasury listed the government’s plan to have
1,138 kilometres of low-volume roads, 1,768 kilometres of new roads, 41
footbridges and the rehabilitation of 224 kilometres of other roads.
But
it is yet to report on plans regarding the Mass Rapid Transport for the
Nairobi Metropolitan region as well as the establishment of an
independent body to audit and certify the construction and maintenance
of roads.
The construction of the second phase of the
standard gauge railway (Nairobi to Naivasha) has started, the PBO noted,
but there is no word on the establishment of the industrial parks there
that the railway is supposed to serve.
It also failed to update MPs on any progress on the 100,000-acre Galana-Kulalu irrigation project.
The
Treasury has said in the Budget Policy Statement (BPS) that it plans to
continue the upgrade of stadiums at Kamariny, Chuka, Karatu-Ndarugu,
Marsabit and Wote butt there is no word on the five sports venues
promised in the Jubilee manifesto and the BPS for the current financial
year.
MPs, through their various committees, have been able to scrutinise the budget policy statements and made adjustments.
It
now remains to be seen whether the Treasury will have adhered to the
changes when the 2017/18 budget is presented in the National Assembly.
IEBC could be forced to restart election preparations - Chiloba
Independent Electoral and Boundaries Commission CEO Ezra Chiloba. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP
Preparations for the next elections could be
thrown into jeopardy because of the ripple effect of the ruling
annulling the award of a Sh2.5-billion tender for printing ballot
papers, the chief executive of the electoral commission has said.
In
a series of tweets Monday night, hours after the ruling by Justice
George Odunga, Ezra Chiloba suggested the Independent Electoral and
Boundaries Commission could be forced to restart preparations for the
elections.
“Basically what Odunga
judgment means is that all decisions made by IEBC in the last three
months were null and void,” the chief executive officer tweeted.
He said that from his reading of the 145-page judgement by Justice Odunga, it would have “huge implications for next elections.”
Mr
Chiloba said this would affect decisions made by the IEBC from October
6, 2016 - decisions on by-elections, ballot papers, audit, staffing,
Kenya Integrated Election Management System, registration, ICT
regulations and others.
All these, he said, were effectively null and void.
There is already another case against the
award of the contract to audit the voters’ register to KPMG while the
procurement of the election management system was allowed by the Public
Procurement Administrative Review Board.
The
case against the award of the contract to Al-Ghurair had been filed by
the Opposition coalition on the basis that the action was contrary to
the Election Laws (Amendment) Act. “It was unreasonable for IEBC to
proceed with the award of tender without taking into account the new
regulations,” Justice Odunga ruled.
Mr
Chiloba appeared to criticize the basis of the Odunga judgement,
saying: “Fundamental departure from public sector governance practice is
the idea that board members should be engaged in procurement
activities.”
Oil explorer Zarara seeks to start Lamu offshore drilling
An offshore oil drilling rig. Zarara Oil & Gas will explore for gas in blocks L4 and L13 in Lamu County. PHOTO | FILE
By BRIAN NGUGI
Oil explorer Zarara Oil & Gas has signalled it
will finally kick off drilling of an exploratory well at its offshore
oil block in Lamu after securing an extension of its licence.
On Friday the National Environment Management Authority
(Nema) invited the public to submit views for an environmental impact
assessment report of the proposed gas exploratory drilling at blocks L4
and L13 in Lamu County.
“Nema invites members of the public to submit oral
or written comments within thirty days from the date of publication of
this notice to the Director- General, Nema, to assist the Authority in
the decision-making process for this project,” said director-general
Prof Geoffrey Wahungu.
Zarara, a fully-owned subsidiary of Midway
Resources International (MRI), had said in disclosures filed with the
London Stock Exchange early last year that it had been given an 18-month
licence extension that will run to June 2017 for blocks L4 and L13.
It had earlier said it will be prospecting for
natural gas in Lamu and, if successful, seek to use the resource in
power generation.
“The extensions will enable Zarara to complete its
preparation and drilling of Pate-2 well on the natural gas discovery in
Lamu County,” the company said in January 2016.
“Zarara’s drilling strategy is to fully appraise
the Pate natural gas discovery and then, in partnership with leading
electrical power generation partners, undertake a phased development of
up to 1,000MW of electricity generation capacity nearby at Port Lamu,
the proposed southern terminal of the Lamu Port South Sudan Ethiopia
Transport (Lappset) project.”
Exploration
Nema said in the notice that in the event that
potentially commercial volumes of hydrocarbons are discovered,
additional exploration wells or appraisal wells are likely to be drilled
in the future to provide greater information on the likely nature and
scale of hydrocarbon resources.
Zarara is the main operator on the two blocks with a
75 per cent stake, while Swiss Oil Holdings controls 15 per cent with
the remaining 10 per cent being the carried interest by the Kenya
government.
Zarara is among licensed oil and gas explorers that
had been on the radar of the Energy ministry for apparently delaying
their contractual agreements.
There has been a global industry slowdown over low oil prices.
Tea price in first 2017 fall as volume at Mombasa auction drops
A worker at a tea farm in Nandi Hills. PHOTO | FILE
By GERALD ANDAE
The price of tea at the Mombasa auction dropped by
Sh23 in last week’s trading, marking the first it has fallen since the
beginning of the year.
Data from Mombasa tea auction indicate that the price of the commodity dropped from Sh318 of the previous sale to Sh295.
East African Tea Traders Association (EATTA) had last week anticipated the good prices would improve in the subsequent sales.
Increase in demand in the last one month that saw
buyers scramble to secure future stocks in the wake of rising prices
occasioned by fears of a looming shortage helped in pushing up the
prices.
The volume of tea offered for sale dropped significantly to shed 1.2 million kilogrammes in the latest trading.
Tea remains a key foreign exchange for Kenya and has in the last two years registered good performance.
According to small scale farmer marketing agency
Kenya Tea Development Agency (KTDA), production of the commodity in the
country fell by 30 per cent in the last five months due to the prolonged
dry spell.
The current drought is expected to cut production
by 12 per cent to 416 million kilogrammes from 473 million registered in
2016.
Consequently, export volumes are expected to drop
by the same margin to 422 million kilos while export earnings are
projected to hit a record high of Sh133 billion in 2017.
The weatherman says the ongoing drought may persist
until April, a fact that is likely to cut production and raise demand
for tea hence impacting positively on the price.
Kenya is the leading exporter of the beverage, selling 95 per cent of its tea in the global market.
READ: Tea exports to Sudan up 27pc on lifting of shelf-life cut order
Tourism funding agency appoints six new managers
Tourism Cabinet Secretary Najib Balala. TFC, formerly Kenya Tourist
Development Corporation, was set up to provide cheap development funding
and advisory services. PHOTO | FILE
By DOREEN WAINAINAH
The Tourism Finance Corporation (TFC) has appointed six new managers.
The agency is seeking to fill positions in legal,
procurement, finance, public relations and communications as well as
audit departments.
“The new TFC management team will deliver to the
tourism industry and Kenyans in general as they will also spearhead an
increased sustainable funding model for the sector,” said TFC managing
director, Jonah Orumoi.
The team of six is made up of Mohammed Ahmed who
will be the Chief PR and Communications Officer, Emily Simiyu as head of
Audit, Patricia Gachungi as head of Procurement, Mary Njeri as head of
Legal and Corporate Secretary, Norman Mwangi as head of Finance and
Grace Ndegwa as Senior Internal Auditor.
Investigations
This comes after TFC last year sent home five top
managers including the heads of the Credit, Human resources, Legal and
IT departments following wrangles over the sale of multimillion-
shilling assets.
The issues within the organisation began in March
following the investigations on the sale of a Sh700 million property in
Mombasa.
Tourism secretary Najib Balala appointed Jonah
Orumoi as acting chief executive of TFC on February 26, three months
before Marianne Ndegwa’s term came to an end — effectively leaving the
agency with two heads.
Mr Orumoi replaced Ms Ndegwa, who was sent on forced leave pending her retirement.
Beneficiaries
The TFC, formerly Kenya Tourist Development
Corporation, was set up to provide cheap development funding and
advisory services for long-term investments in the tourism industry.
The corporation, which has a loan book of more than
Sh1 billion, extends loans to tourist sector investors at a low
interest rate of nine per cent per year and has funded over 200 projects
in all the 47 counties since its inception.
The facilities, which have benefited from the fund
include cottages, hotels, restaurants curios and other tourism-related
businesses.
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