Updated December 2016 | By International Budget Partnership Kenya
Kenya’s Budget Review and Outlook Paper (BROP) is a backward and forward looking paper comprised of three key elements:
- Review of budget performance from the most recent financial year
- Updated expectations for key economic indicators and implications for budget performance in the current year and upcoming year
- Proposed sector distribution of the budget for the coming financial year.
Key findings of IBP Kenya’s analysis of the 2016 BROP are:
- Revenue and expenditure performance were both below target in 2015/16. Actual revenue and expenditure growth were also both below the average for recent years. Expenditure grew at a slightly lower rate than revenue in 2015/16, resulting in a lower deficit.
- While the BROP suggests that Kenya is containing the wage bill, the analysis in BROP 2016 does not represent the full costs of government employment. This makes it difficult to know how well the wage bill is being managed.
- The approved 2016/17 budget was not realistic, leading to a fall in the projections for revenue and expenditure in BROP 2016. The decline in development expenditure was anticipated by Treasury, which previously indicated that the government was unlikely to collect almost half the external financing in the proposed budget. Parliament, however, approved this unrealistic budget. BROP projections for revenue for 2017/18 are also unrealistic in light of past growth rates.
- In 2017/18, Treasury is proposing to reduce the share of the budget for energy and infrastructure, while education and public administration and international relations will take an increasing share.
- The BROP 2016 provides inadequate explanations for past performance and weak justifications for new proposals. Although the Budget Policy Statement 2017 was published shortly after the BROP this year due to the compressed budget calendar, it introduces a number of changes from BROP that are not explained. This includes increasing the size of domestic revenue versus domestic borrowing, and changing the share of the budget going to different sectors.
- Kenya: Analysis of the 2016 Budget Review and Outlook Paper (IBP Paper, December 2016)
- 2016 Kenya National Budget Review and Outlook Paper
- Kenya: Analysis of the 2015 Budget Review and Outlook Paper (IBP Paper, January 2016)
- 2015 Kenya National Budget Review and Outlook Paper
- How to Read and Use Kenya’s Budget Review and Outlook Paper (IBP Guide, January 2016)