National treasury:Government is broke

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BY JOAN WANJIKU,NAIROBI,7TH MARCH 2018-Treasury CS Henry Rotich says the  country  cannot be able to fund apart of its important economic  projects.

Appearing before  the Senate Finance committee on Wednesday ,Rotich said that the government is ‘broke’ and unable to raise much in terms of revenue.

The CS mentioned  prolonged election period and drought as some of the causes that led to the shortfall.

The devolved units were allocated Sh302 billion in the 2017/18 financial year, meaning that in the next one, the amount will decline to between Sh287billion and Sh284 billion.

The Cabinet Secretary said they intend to introduce an amendment to the Divison of Revenue Act, to reduce monies meant for counties.

“We are running short of revenue. There was a slow-down in business activities because of elections. We are now catching up,” he said.

He further explained that the country has a revenue shortfall of Sh70 billion.

“The deficit has implications on expenditure. We have already started austerity measures and are asking Governors to do so too,” he noted.

But Rotich said ‘broke’ is a loose term “that just means that our estimation for revenue collection has reduced”.

“Telling me not to reduce the allocation means the option is to borrow but you are are telling me not to touch borrowing,” he told the committee members.

The Minister further told Senators that as of Tuesday, they had disbursed Sh134 billion – 43 per cent of what counties are to get.

But he added: “There are a lot of things that even the President wanted to do after elections but the money is not forthcoming and we have had to review [the projects and put them on hold. Nothing stops counties from doing the same.”

Rotich further said the government was proposing to amend the Division of revenue act to reduce the revenue allocation to counties.

The CS appeared before the senate to explain why the government had decided to cut down on county allocation by Sh.15billion.

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