Treasury now opts to empty State coffers to pay public debt
7 months ago, 9 Mar 00:11
The National Treasury spent more than 90 per cent of the Consolidated Fund on debt repayment in the first quarter of the current financial year, new data shows. Further highlighting the strain the country’s public debt is exerting on the economy, the latest report from Controller of Budget Agnes Odhiambo shows that the share of the fund that went to debt repayment rose by 35 per cent in comparison to a similar period the previous year. “Public debt had the highest proportion of the CFS (Consolidated Funds Services) budget at 92.9 per cent,” said Ms Odhiambo in the latest review of Treasury’s expenditure plan. In the first three months of the current financial year alone, Sh75 billion out of the total of Sh85 billion spent through the Consolidated Fund went to debt repayment, with another Sh9 bilion going to pensions and gratuities. The Consolidated Fund is the key exchequer account where all monies collected and withdrawn on behalf of the national government are kept. It acts as the primary source of public funds and requires Treasury to seek approval from the Controller of Budget and the Auditor General before withdrawals are made. In the current financial year, Treasury has allocated Sh621.8 billion to the repayment of public debt, representing a 35.2 per cent increase from the previous year. This means that for every Sh100 spent on this year’s budget, Sh27 will go to servicing debt. The Controller of Budget’s report further indicates that Sh334 million has been paid out to State parastatals as part of the Sh1.2 billion allocated to repayment of guaranteed debt in the current financial year. Government ministries and departments spent Sh212.4 billion on recurrent expenditure, with more than 40 per cent of this (Sh78 billion) going to payment of salaries and wages. The State Department for Interior was one of the largest spenders on personnel emoluments, accounting for Sh11 billion of the Sh78 billion cumulatively spent by the 65 government ministries, departments, and agencies. The travel expenses of members of Parliament also took up a significant chunk of the recurrent expenditure in the first three months of the current financial year. Members of the National Assembly and Parliamentary Service Commission spent a total of Sh507 million on domestic travel despite the period having been marked by transition following last year’s General Election. Other leading spenders in the first quarter of the financial year include the State Department for Sports, where Sh337 million of its total Sh530 million spending plan was directed at foreign travel. The State Department for Broadcasting and Telecommunications spent Sh337 million in printing and advertising. The State Department of Public Service and Youth Affairs, on the other hand, spent Sh189 million while the State Department for Interior spent Sh102 million on rentals and rates for non-residential buildings.
Category: business news