Kenya: Analysis of Budget Policy Statement 2016

February 2016 | by International Budget Partnership Kenya

Each year Kenya’s National Treasury must table a Budget Policy Statement (BPS) in Parliament by February 15. The tabling of the BPS is a critical moment in the annual budget process when a number of key decisions are made. These decisions include:

• The overall size of the national budget (revenue, spending, and deficit).
• The sector distribution of the budget (share of the budget for health, education, etc.).
• How revenue is divided between the national and county levels.

Key findings of our analysis are:

• Total spending for 2016/17 is set to rise to Ksh 2.05 trillion. This reflects more modest ambitions for spending and a desire to reduce the deficit relative to recent years. The government expects to collect Ksh 1.50 trillion in revenue. This will leave a deficit of roughly Ksh 555.4 billion, 6 percent smaller than the revised 2015/16 budgeted deficit.
• Infrastructure and energy remains important, but the share of the 2016/17 budget devoted to this sector will dip slightly from 27 to 25 percent. The share of the budget devoted to governance, justice, and law and order will increase from 10 percent to 12 percent in preparation for next year’s general election.
• The unconditional transfer of funds to the countries (known as the equitable share) is set to rise by 7.9 percent. This is lower than previous years and far below the 15 percent increase proposed by the Commission on Revenue Allocation. Treasury has not explained its use of a lower growth rate.
• Despite the public being invited to comment on the draft Budget Policy Statement in February, the final statement does not indicate how public input was taken into account or how it influenced the budget. This could imply that input from the public was not satisfactorily considered.

Downloads

• Kenya: Analysis of Budget Policy Statement 2016 (February 2016)
• 2016 Kenya Budget Policy Statement

Related

• Kenya: How to Read and Use a Budget Policy Statement and a County Fiscal Strategy Paper (IBP Guide, February 2016)
• IBP Kenya’s Jason Lakin talks about the 2016 Budget Policy Statement in this K24 News Clip: