Budget without survey dicey affair

The National Treasury will unveil what is considered one of the most ambitious budget estimates on Thursday which is expected to achor the country’s economic recovery post Covid-19 shocks.

At Sh3.66 trillion, this year’s budget is one of the biggest in Kenya’s history, and if well utilised could draw the country closer to recovery.

However, concerns abound that the financial year 2021/22 budget estimates are not only difficult to predict, but with the Covid-19 pandemic and its unpredictable variants, forecasting will be a tough call.

Therefore, Treasury’s magic will depend on whether it has managed to muster past, current and future economic shocks, creating a catalogue on how to deal with each unique situation.

However, mandarins at Treasury could have thrown the country under the bus with this year’s budgetary estimates being read without guidance from an economic survey which has not been launched to date. 

This is probably the first time since independence the government has not released an economic survey before the budget speech, a move that has left experts concerned about the accuracy of the proposed estimates and the knock-on effects. 

The economic survey, which is released every year by the Kenya National Bureau of Statistics, provides a wide range of data upon which Treasury relies to make projections for the next financial year. 

Since it acts as a resource allocation guide for Treasury during the budgeting process, questions about reliability of the current estimates are, therefore, valid.

Granted, release of the 2021 Economic Survey may be late on account of delayed submission of data by respondents due to Covid-19, government has access to lots of data. Such could easily be unlocked, if need be, for guidance.

This now raises the question whether Treasury would revise its growth projections for 2021/22 should the economic survey contradict its estimates once it is released.

Further, the Parliamentary Budget Office (PBO) has noted that the proposed estimates do not seem to have a clear policy direction.

The agency wonders why, for instance, the budget did not give overriding importance to a Covid-19 economic recovery strategy and the Big Four Agenda.

But with the increased debt portfolio demanding that more money goes into repayment of loans, Treasury will be hard pressed to unleash a magic wand to regenerate the economy.

When all is said and done, the country can only hold its breath as Cabinet Secretary Ukur Yatani prepares to unveil the budget secrets on Thursday.