On the Budget – What should happen under the new constitution

Posted by on 27th May 2011

Categories:   Budget Kenya Constitution

By Mzalendo Contributor – Moreen Majiwa (@mmajiwa)

The Ministry of Finance and Treasury have been getting a lot of press recently a majority of it
negative.  The latest debacle is the uncertainty over when the budget will be presented before
parliament and the process that it should go through before this happens.

In the same week that Finance Minister Uhuru Kenyatta stated with precision the time and date
of the reading of budget speech for the fiscal year 2011/2012 i.e. 3.00 p.m. 8th of June 2011. The
Parliamentary Budget Committee announced that in making the statement the Minister is not only
acting under the old constitution but is attempting to subvert the new one.

While the old constitution gave the Executive near sole discretion over budget preparation and
expenditure management the new constitution changes the system and structures through which
the budget presented. Under the old constitution the budget was prepared by the Treasury in an opaque
process and then read to public on a designated day.  The new constitution requires that the
Cabinet Secretary submit estimates of the revenue and expenditure of the national government
for the coming financial year to parliament at least two months before the end of each
financial year 221 (1).  The National Assembly then considers the estimates of revenue and
expenditure, a committee of the Assembly then discusses and reviews the estimates and makes
recommendations to parliament, with input from the public 221(4).  The Committee then tables its
report before parliament, which then debates the report and recommendations and decides either
to adopt or reject it.

In effect Article 221 reduces the power of the Treasury and increases the power of parliament
to decide how to spend government funds. However, the constitution also leaves a lot of the
detail to be worked out through implementing legislation and requires the establishment of new
structures for discussion and approval of the budget. So while the new constitution is clear on the form and process of the presentation of the budget in the new dispensation,  it is silent on how and when this new system is to be made operational and
hence the confusion that now exists.

At this point an argument can be made that much of the implementing legislation and structures
required to transition to the new budgetary process are yet to be made. Further the constitution
refers a ‘Cabinet Secretary’ as opposed to a minister this would imply the Article 221 of constitution
would be effected after the first election under the new constitution when Cabinet Secretaries will
be in place.  Over the next 2 weeks it will be interesting how this tension is resolved and what form the
budgetary process will take.  Since the Supreme Court that is supposed to resolve constitutional
issues is yet to be set up, may be the Constitution Implementation  Commission should step in.