Budget team warns on risks of ballooning pending bills
A parliamentary committee has raised alarm over the surge in pending bills which in turn hinder the country’s development agenda and overall liquidity of the economy as the country heads to the next financial year.
The Budget and Appropriation Committee (BAC) led by Kanini Kega says pending bills amounted to 432.2 billion as of September 2021, with State Corporation and ministries departments and agencies (MDAs) accounting 87.8 percent and 12.2 percent of the bills, respectively. “The committee is concerned that some reductions in the development budget could potentially lead to further pending bills accumulation especially where commitments had already been undertaken or there are contractual obligations,” BAC noted in its budget policy statement.
State Corporations pending bills include payment to contractors, suppliers, unremitted statutory, and pension arrears for Local Authorities Pension Trust.
The total approved budget for 2021/22 stood at Sh1.942 trillion with the recurrent expenditures taking Sh1.274 billion as Sh668.378 billion went to development expenditures. However, BAC says that some of the upward adjustments in the operations and maintenance (O&M) budget of some MDAs in the supplementary budget opens doors for abuse as there are no justification provided.
“Given the resource constraints, higher O&M spending could ‘crowd out’ development related spending with adverse effects on economic growth outcome,” Kega said.
Financial burden
Meanwhile, Consumer Federation of Kenya (Cofek) wants the government to either abolish value added tax (VAT) on gas or charge 8 per cent on the commodity to reduce its prices.
Secretary General Stephen Mutoro said this will relieve the financial burden on the common mwananchi and also help in the uptake of clean cooking energy.
“The purpose of this is to remove the burden on ‘Wanjiku’ who rely on LPG cooking and help increase the uptake of this clean cooking energy,” he said.
The measure is part of a raft of proposals Cofek has suggested to be included in the financial year 2022/23 budget that will be tabled in Parliament in a fortnight.
Cofek has also proposed halving of the anti-adulteration levy on kerosene to Sh9 per litre of the customs value of illuminating kerosene, which shall be paid by importers at the time of entry into the country.
