Lower oil prices, higher public and private investment and recovery of the agricultural sector, are expected to boost Kenya’s economic growth in 2015/16 financial year.
National Treasury Cabinet Secretary Mr. Henry Rotich however pointed out that Ministries, Departments and government Agencies (MDAs) should be cautious during the implementation of this year’s budget which he noted was prepared against a background of uneven and sluggish global economic recovery.

Mr. Rotich further observed that world economic growth remains moderate, with uneven prospects across the major economic powers and regions.
The Cabinet Secretary was speaking at Mombasa Beach Hotel, in Mombasa County, while closing a three day post budget review retreat which was attended by senior government officers and representatives from international financial institutions including the International Monetary Fund (IMF).
He called for effective budget implementation, which he said, would enable the country to achieve macro-stability, and desired budget outputs and outcomes.
“The macro-fiscal framework underpinning the budget seeks to ensure macro stability. We have to contain the revenue effect, expenditure, fiscal deficits, inflation and borrowing at sustainable levels,” Mr. Rotich said.
He said low absorption of development budget and especially foreign financed projects component should be addressed by MDAs before asking for additional funding.
“It is the responsibility of MDAs to plan their annual expenditure within the approved budgetary provisions. Consideration for supplementary funding will only be restricted to unforeseen, unexpected and emergency cases and as guided by the provisions of section 44 of the Public Finance Management Act, 2012,” said the Cabinet Secretary.
Funding to any additional budgetary request to MDAs provided for under Article 223 of the constitution, he added, will only be done within the overall fiscal framework which will entail rationalizing the budgets to realize savings.
Mr. Rotich said: “MDAs seeking additional funding will have their budgets re-opened for scrutiny with a view of getting equivalent savings, and any surplus realized will be used to reduce the deficit which is already big.”
In a bid to improve absorption of funds, the Cabinet Secretary urged MDAs to have realistic workplans, procurement plans and cash flow plans which they must implement, monitor and report on regularly.
In order to enhance transparency and accountability in Public Financial Management, he said MDAs should always uphold prudent financial management by strictly adhering to the provisions set out by the law and the various Treasury Circulars.
Mr. Rotich called for review of the current Programme Based Budget (PBB) design and structure, definition of outcomes, outputs and formulation of performance indicators and targets for programmes with the inclusion of the best international practices in order to make the budgeting process more responsive and effective.
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