Budget process: What CSOs want

In Summary

• They have cited lack of accountability by Treasury in releasing the draft policy statement on the same day public sector hearings were closed.
• In November 2019, Treasury CS Ukur Yattani opened the floor for public participation in the drafting of a debt policy framework aimed at managing the debt crisis.
• The policy was to give the debt situation a context as well as provide a clear proposal on solutions by the government.

Civil society organisations have called on the government to give the public more time to submit recommendations on the 2020/2021 budget.

They have cited lack of accountability by Treasury in releasing the draft policy statement on the same day public sector hearings were closed.

The CSOs, led by the Institute of Social Accountability, said on Friday that ignoring the week-long time frame for public participation could affect the quality of the budget document as recommendations that are left out could constitute solutions for a cost effective budget.

UNREALISTIC TARGETS

The CSOs further said the revenue targets for the draft budget are unrealistic.

They noted that in order to meet the targets, the government will have to increase taxes or resort to borrowing as these are the easiest options.

"More borrowing will create a debt crisis because the public debt, which is at Sh 6.2 trillion, an equivalent of 64 per cent of the GDP, is already past the recommended mark," said Wanjiru Gikonyo, the institute's National Coordinator.

The budget deficit for the 2020/2021 financial year budget is more than Sh600 billion. Therefore, if the draft budget is anything to go by, borrowing and increased taxation are inevitable.

In addition, the draft policy statement says the government will borrow about Sh247.3 billion externally and Sh 318.9 billion domestically to finance part of the budget.

HEAVY BURDEN

The CSOs further said that such decisions, taken without considering long-term effects, will continue to hurt the progress of the common man, as they are the ones who will shoulder the debts.

Recent events have seen the government impose more taxes, including the three per cent turnover tax on all businesses earning below Sh5 million.

The CSOs attributed these troubles to non-engagement of members of the public in development of major economic policies and parliamentarians' failure to protect their interests.

"On TV and in public, parliamentarians said they would not support raising of the debt ceiling proposed by Treasury. Then later, after a bit of complaining, perhaps to look like their hand was forced, they raised the debt ceiling," Ms Gikonyo noted.

NO STRATEGY

In November 2019, Treasury CS Ukur Yattani opened the floor for public participation in the drafting of a debt policy framework aimed at managing the debt crisis.

The policy was to give the debt situation a context as well as provide a clear proposal on solutions by the government.

But according to the CSOs, failure to engage the public in designing the framework, in violation of articles 1, 10, 201 and 232 of the Constitution, resulted in release of a policy without a strategy on how the government plans to reduce debt without hurting small business, informal traders and ordinary taxpayers at the expense of large corporations.

The organisations want Treasury to reopen development of the proposed debt policy and borrowing framework for meaningful public participation.