Kenya's Parliament building.
The Budget and Appropriations Committee (BAC) has ruled out the possibility of allocating additional funding to ministries, given the Sh876.1 billion Budget deficit for the financial year starting July 1.
BAC chairman Samuel Atandi said the biggest conversation facing the committee as it starts receiving budget proposals from Departmental Committee chairpersons is the fiscal deficit.
He said, although the fiscal deficit of Sh876.1 billion is the lowest since he joined Parliament, revenue projections by the Treasury have not been accurate.
"We as the committee will operate under a tight situation given the huge budget deficit," Mr Atandi said
"The room for manoeuvre is not there. Requests for additional funding from the
MDAs and this is a no-go zone for us."
Mr Atandi asked the committee members not to entertain additional requests for funding, given the tight fiscal framework.
Mr Atandi made the decision at the start of the receipt of committee reports on the scrutiny of budget estimates from line Ministries, Departments and Agencies (MDAs) of government for the financial year 2025/26.
Nearly all departmental committees have received requests from MDAs for additional funding, arguing their budgets had been subjected to massive budget cuts compared to what had been allocated in the Budget Policy Statement (BPS) for 2025/26.
Labour committee chairperson Ken Chonga decried the allocation for State Department for Labour and Skills Development, whose budget has been cut by Sh1.1 billion and "should therefore be reinstated."
The Parliamentary Budget Office (PBO), which advises MPs on budget and fiscal matters, told the committee that the Treasury has proposed to borrow Sh592.1 billion from domestic sources and Sh284 billion from external sources to plug the budget deficit..
The Treasury has set the 2025/26 overall budget at Sh3.36 trillion, out of which Sh1.7 trillion will be spent on recurrent expenditure, and Sh707 billion will go to development expenditure.
Immediate former BAC chairman Ndindi Nyoro raised concerns over what he claimed was Treasury's manipulation of the budget deficit to gross domestic product (GDP) ratio in order to secure external loans.
There is the manipulation of the deficit to GDP ratio in order to secure external loans. The GDP in nominal terms is growing higher than in real terms," Mr Nyoro said.
"There is also a variation in the projection of revenue by 67 billion. There is no change in the monies that are devolved because we allocated Sh405 billion in the last financial year, and the same has been allocated in the coming financial year. Are we supporting devolution?"
Kitui Central MP Makali Mulu said, Parliament passed the law that pegged borrowing to 50 percent of GDP.
David Ochieng (Ugenya) demanded the value for money for investments in ICT by the government.
He also wanted the PBO to explain the efficiency and efficacy of the continued fertiliser subsidy. Value for money on the government-to-government oil deal, and the refinancing of public debt through external borrowing.
"On the debt repayment, we are refinancing our debt and taking loans. How are the interest rates?" Mr Ochieng asked.
The PBO asked MPs to refer the questions to the Treasury, which is better placed to respond.
