MPs lose Sh2.5b in new Covid-19 spending plan

Members of Parliament have become the biggest casualties in changes to the government’s spending plans, losing Sh2.5 billion from their allowances and travel kitties.

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This money will be realised from a reduction in their sittings and travel plans as a result of the Covid-19 outbreak.

In revised Budget proposals tabled in Parliament on Tuesday, battling the coronavirus disease, which is ravaging the economy on many fronts, has been allocated Sh2.6 billion.

This is an increase from Sh1.5 billion that had been set aside last month.

Given how the figures compare, the State will be spending as much to fight the disease as it will be saving from the legislators’ allowances.

Several MPs had already expressed an unwillingness to take pay cuts to boost efforts to cushion Kenyans from the ravages of the viral disease.

They had indicated that contributions to the Covid-19 emergency response fund should be voluntary, and not through pay cuts, which have been embraced by other arms of government.

Now, with their perks reduced, it is likely to open a new battlefront with the Executive, which is facing the seemingly insurmountable task of cushioning Kenyans from the impact of the coronavirus.

The Supplementary Budget II further shows that one of President Uhuru Kenyatta’s legacy pillars – universal healthcare – has been severely hurt after its intended funding was re-allocated to stimulating the economy.

To take money to the grassroots, it appears that President Kenyatta will be banking on the massive rollout of low-seal roads countrywide. These infrastructure projects tend to be more labour-intensive than machine-driven.

In total, the Infrastructure docket, where road construction falls, saw its budget enhanced by Sh44 billion, an amount that should be spent between now and June 30.

National Treasury Cabinet Secretary Ukur Yatani has made the wide-ranging changes to the Budget drawn by his predecessor, Henry Rotich, snatching huge allocations from ministries.

Development budgets for various ministries, departments and agencies (MDAs) took the biggest hit in the spending realignments that would collectively save Sh74 billion.

Considering that the country is already in the final quarter of the financial year, it is unlikely that the MDAs would have absorbed the funds in the two-and-a-half months left to June 30.

From personal allowances paid as part of MPs’ salaries, Mr Yatani expects to realise Sh780 million, while another Sh158 million would be saved from foreign travel.

Budgets for tea, mandazi and flowers for Parliament, formally known as hospitality supplies and services, have been cut by Sh21 million.

Foreign loans

Allowances for the Office of the Speaker of the National Assembly, currently headed by Justin Muturi, had its budget for foreign travel, training and hospitality chopped by Sh33 million.

The Treasury has also indicated that it would be retiring short-term debts worth Sh100 billion, which were procured from the local market through the sale of Treasury Bills.

The decision to free these funds would have huge implications on the availability of money in the economy, with the likelihood that investors will put the money in productive sectors.

It may, however, have been informed by the cash crunch in the market witnessed in recent months, with lenders giving the State’s efforts in the weekly borrowings a wide berth.

Yatani’s own ministry suffered the single-largest cut of Sh36 billion in its spending plans, as it opted to postpone the repayment of foreign loans in the current financial year.

Prior estimates had it that Kenya would repay Sh33.6 billion to China in the current financial year, but the repayments have since been reduced by Sh10.5 billion.

It is likely that the balance of Sh23.1 billion may have already been paid within the financial year, which started on July 1, last year.

In contrast to the Chinese case, however, Kenya is repaying nearly three times the Sh1.5 billion it planned to give back to France.

The Treasury is also repaying Sh17.7 billion to investors of the Eurobond issued in 2019 in spending that was not planned for in the original Budget.

No explanation was given for the accelerated debt repayment.

From the revised budget, it is also clear that Kenya missed out on the Sh2.6 billion in aid granted through the GAVI initiative, a Bill & Melinda Gates Foundation package to support immunisation.

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