Jubilee regime grows public spending two-and-half times since 2013

President Uhuru Kenyatta and his deputy William Ruto on October 18, 2017. FILE PHOTO | NMG

By CHARLES MWANIKI
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Summary

• President Uhuru Kenyatta’s administration has grown the size of Kenya’s annual budget by two and a half times in its 10 years, reflecting the cost of expansionist expenditure on infrastructure and a Civil Service that has been bloated by devolution.
• In the period, government revenue has increased from Sh920 billion to the Sh2.14 trillion it expects to collect in the upcoming fiscal year, a rise of 2.3 times.
• The cost of servicing this debt is now the biggest expenditure item in the national budget ahead of recurrent and development allocations.

President Uhuru Kenyatta’s administration has grown the size of Kenya’s annual budget by two and a half times in its 10 years, reflecting the cost of expansionist expenditure on infrastructure and a Civil Service that has been bloated by devolution.

The first budget the administration rolled out in the 2013/14 fiscal year stood at Sh1.32 trillion, rising over the years to the Sh3.31 trillion the country expects to spend in 2022/23.

In the period, government revenue has increased from Sh920 billion to the Sh2.14 trillion it expects to collect in the upcoming fiscal year, a rise of 2.3 times.

Kenya’s GDP has in the meantime expanded from Sh5.3 trillion to Sh10.75 trillion.

The faster growth in expenditure than revenue collection has thus deepened the government’s budget hole, leaving it needing to borrow higher amounts each year just to balance its books.

In the year starting June, the budget deficit is expected to hit Sh1.17 trillion — up from Sh400 billion a decade ago — a gap that will be closed through new borrowing to add to the already large public debt pile of Sh8.2 trillion.

The country has struggled to tame its spending due to the expanded recurrent needs due to devolution, and massive investment in infrastructure such as roads, dams and the standard gauge railway that has largely been financed through external debt.

The cost of servicing this debt is now the biggest expenditure item in the national budget ahead of recurrent and development allocations.

The International Monetary Fund (IMF) last December called on the government to expedite its fiscal consolidation efforts in order to forestall debt vulnerability.

“The authorities should continue executing their multi-year fiscal consolidation plan to reduce debt vulnerabilities,” said the IMF in its report of meetings with Kenyan officials.

Among the areas the IMF highlighted for possible consolidation, are non-performing State-owned enterprises, which have taken up billions of shillings in taxpayer bailouts and funding without providing a viable return.

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