MPs say budget is unrealistic

MPs accuse Treasury of unrealistic budget

Kenya Revenue Authority Commissioner-General John Njiraini (right) with Treasury PS Kamau Thugge during the 2018 Tax Stamp Forum in Nairobi. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• Speaking during the National Assembly leadership training in Mombasa, Mr Ichung'wa said Treasury keeps on coming up with strategies of revenue projections which are never met.
• Minority leader in the National Assembly John Mbadi said the Treasury had a bigger responsibility of ensuring that borrowed money is put on projects that ensure economic growth.
• MPs were reacting to a presentation by Mr Benson Kiriga from Kippra and Treasury's debt policy director Daniel Ndolo, who had argued that Kenya's debt levels were still within sustainable levels.

   

By SAMWEL OWINO
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MPs have accused the National Treasury and the Kenya Revenue Authority of coming up with unrealistic revenue projections which has led to huge budget deficits.

The chairman of National Assembly’s Budget and Appropriations Committee, Mr Kimani Ichung'wa, accused the Treasury of failing to adhere to the debt management strategy paper, a move which has led to accruing of more debt to fund huge capital infrastructure investments.

Speaking during the National Assembly leadership training in Mombasa, Mr Ichung'wa said each year, the Treasury keeps on coming up with strategies of revenue projections which are never met.

"We have never been realistic in our revenue projections. If we do not meet the targets for the last financial year, how do we meet the projections for the next one which are even higher?" Asked the MP.

Minority leader in the National Assembly John Mbadi said the Treasury had a bigger responsibility of ensuring that borrowed money is put on projects that ensure economic growth.

Mr Mbadi said borrowed money should not be used to run ministries.

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"The budget office within the Ministry of Treasury is not strong enough as it should stop the government's appetite from borrowing," the lawmaker said.

GOOD STRATEGY

Nominated MP Cecily Mbarire said the country needs a good strategy on how to manage it's debt level.

"Don't tell us that our debt level is manageable, we need a well thought out plan on how to get out of the woods," Ms Mbarire said.

Majority whip Benjamin Washiali said the country needs to have a conversation on whether the projects the government is borrowing to fund are able to pay back.

Kiminini MP Chris Wamalwa blamed corruption and inflated cost of projects for rising debt levels which he pointed out should not be beyond 50 per cent of the GDP.

'SUSTAINABLE LEVELS'

The MPs were reacting to a presentation by Mr Benson Kiriga from the Kenya Institute of Public Policy and Research and Treasury's director of debt policy, strategy and risk management, Mr Daniel Ndolo, who had argued that Kenya's debt levels were still within sustainable levels.

They, however, pointed out that the government needs to scale up the war against corruption so as to ensure that borrowed money can make economic sense.

Mr Ndolo also underscored the need for tax reforms, adding that Kenyans need to address their attitude towards payment of taxes, noting that the Kenya Revenue Authority needs to do more civic education in that regard.

Currently, the authority is only able to collect 60 per cent of the projected revenues.

The lawmakers expressed concern that in future, the country could be spending too much of the country's foreign earnings to pay debt, given that a change in the dollar exchange rates could accrue huge interests.

They also called on the government to evaluate the kind of investment funded by public debt.