CS Yatani Increases 2020/21 Budget to Ksh2.92T

Treasury Cabinet Secretary Ukur Yatani has increased the Ksh2.79 trillion 2020/21 budget to Ksh.2.79 trillion.

In the supplementary budget that is set to be tabled in the National Assembly for approval, the CS cited the increased allocations to development projects for the year as the main reason for the increase in the budget.

According to the final Budget Review and Outlook Paper (BROP) published on the National Treasury website over the weekend, Yatani has proposed to raise allocations to development to Ksh.675.2 billion from the originally approved Ksh.589.7 billion.

The recurrent expenditure has also gone up from Ksh.1.844 trillion to Ksh2.014 trillion an increase of Ksh17 billion.

The CS has also increased the allocations to Counties to Ksh.395.2 billion from Ksh.369.2 billion.

This is after the treasury carried forward arrears amounting to Ksh.26 billion from the equitable share in the last financial year.

However, the revised budget will see the country’s debt grow further with the government set to borrow Ksh.1 trillion in the financial year to June 2021 to fill the financing hole.

The country’s domestic borrowing is also expected to increase from Ksh.600 billion shillings from the originally planned Ksh.494.3 billion shillings.

National Treasury. Photo/Courtesy


The ambitious spending has seen the Treasury turn the screw on the Kenya Revenue Authority (KRA) by reinstating ambitious targets for the tax man.

While Treasury had eased the burden on KRA by lowering targets to Ksh.1.523 trillion in the draft BROP, the subsequent spending raise has seen the targets raised to Ksh.1.602 trillion- a near par with the originally approved Ksh.1.634 trillion.

The new targets are expected to mount pressure on the tax man who has struggled to raise tax revenues as various revenue heads shrink from the ongoing tough operating environment which has seen business close shop and employees laid off.

For instance, KRA tax collections through the first quarter of the 2020/21 fiscal year were down 15 per cent at Ksh.317.7 billion in comparison to Ksh.372.3 billion last year.

The newly published budget estimates are expected to raise credibility questions from both economists and the National Assembly as the National Treasury carry’s on its trend of raising spending against falling revenue sources.

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