The government, through the National Treasury, is planning to bail out struggling Kenya Airways by allocating of Sh26.5 billion and other undisclosed expenditures to the national carrier in the mini-budget tabled in Parliament.
The allocation to Kenya Airways emanated from slow-moving projects, Treasury Cabinet Secretary Ukur Yatani saying that the boost is to help the airline maintain its stalled planes, pay for utilities, salaries and also counter the effects of the pandemic.
The national carrier had been put up for nationalization to end the airline’s ever-emerging tribulations.
The supplementary budget of unforeseen expenditures that will put more pain to taxpayers, indicates fresh allocations of Sh24.9 billion to fuel subsidy, Sh9.1 billion to prepare for the August General Election and Sh8.5 billion for Covid vaccines to the Ministry of Health.
The mini-budget will also cater for drought, settling pending bills, salary adjustments, Competency Based Curriculum infrastructure and changes in development partners-funded projects.
“There is increased demand for additional priority expenditure, which poses a challenge to the implementation of the budget,” Yatani says in the document.
The Defence ministry is also among the top gainers with the allocation of Sh15 billion for security support and salary shortfall related expenditures.
Yatani has also sought approval for Sh3.3 billion more to State House, being Sh1.8 billion for operation and maintenance and Sh1.2 billion for the Nairobi Metropolitan Services.
Public universities will receive Sh8.5 billion more to cater to their tuition expenses and for research. Major beneficiaries are Kenyatta University, the University of Nairobi, and Moi University.
The school feeding programme in the early education sector receives a boost of Sh3 billion while secondary schools and the Teacher Service Commission (TSC) receive Sh392 million and Sh6.9 billion respectively.
The TSC allocation should go toward hiring more teachers.
Kenya Power received Sh3.3 billion to boost its restructuring programme.
This has seen a 3.3 per cent jump of the national budget from the original plan presented in April last year, widening the budget deficit further.
“The overall change in the national government ministerial budget, excluding the consolidated fund services and county allocations, from the original approved budget is an increase of Sh126.3 billion,” said Yatani.
He noted the increase to expenses linked to the elections, Covid-19 expenditures, including Sh1.3 billion for building a vaccines plant, and the bailouts.
This increased the budget deficit from the original projection of 7.5 percent of gross domestic product (GDP) to 8.1 percent, signalling additional borrowing to plug the financing hole.