President Uhuru Kenyatta has signed into law the Supplementary Appropriation Bill, 2018 allowing National Treasury to issue Sh47.3 billion from Consolidated Fund to provide public services.
The bill signed at State House, Nairobi yesterday entrenches austerity measures that will guide government expenditure for the financial year ending June 30, 2019.
Allocations in the new law reflect a significant reduction from what was allocated in the last financial year which is in line with the ongoing austerity measures aimed at cutting down government expenditure.
The State Department of Housing which is steering the affordable housing pillar of the Big Four development agenda is one of the key beneficiaries of the new law having been allocated Sh21 billion.
Department of Public Works and the Judiciary were allocated Sh1.9 billion and Sh1.5 billion respectively.
The bill also allocates Sh2 billion to the State Department of Tourism for promotion programmes while State Department of Wildlife has been assigned Sh873 million among others. National Assembly Speaker Justin Muturi delivered the bill to the President.
Uhuru announced wide-ranging austerity measures and budget cuts last month in a bid to reduce the widening deficit between revenue and expenditure. He said the cuts would affect hospitality, foreign and domestic travel, training and other less essential spending, adding that these changes would cut across all arms of government.
“These budget cuts ask all of us in government to tighten our belts. It also ensures that the sacrifices made by tax compliant Kenyans are matched by discipline,” said the President had said in a televised address from State House, Nairobi.
The National Treasury aims to reduce the budget deficit from 7.8 per cent in the 2017/18 financial year to 5.7 per cent in the 2018/19 financial year.
Uhuru further cited budgetary demands as his reason for rejecting the Finance Bill amendment that aimed to postpone the valued added tax VAT on fuel by two years and instead counter-proposed a reduction of the VAT on petroleum products by 50 per cent.
The President who returned the bill to Parliament with his recommendations, said the new constitutional order widened the structure of government with the National Assembly growing from 290 members to 349, and 67 elected and nominated senators.
“We also have 47 governors, 47 deputy governors, and 47 new county assemblies – in which sit more than a thousand MCAs,” he said.
“Additionally, we have 16 independent offices and commissions, excluding the Judiciary. As you can see, the enjoyment of our new rights is expensive, unprecedentedly so,” he said.