2023 Budget Starts Amid Ruto, Raila Election Dispute

Treasury has asked Cabinet Secretaries and parastatal CEOs to prepare budgets for the year starting July 2023 using policies of outgoing President Kenyatta’s administration amid uncertainty on when the new Head of State will take office.

Treasury Cabinet Secretary Ukur Yatani has directed accounting officers to start the process of drafting policy documents, reports, and Bills under the existing budget framework ahead of the decision of the Supreme Court on presidential petitions.

This outlook has forced the Treasury to start the budget-making process under the current policies with the understanding that the numbers could be revised under a new President.

“At the time of issuing this circular, the transition to the new government has not been concluded,” Mr. Yatani wrote in the circular dated August 24.

“In line with regulation 57 of the Public Finance Management Regulations, 2015, the National Treasury may be required to revise the budget as a result of new policies or reorganization of government that may occur.”

Rule 57 of the Public Finance Management (PFM) Regulations allows the national government to create additional ministries or departments or abolish the existing ones and transfer functions from one ministry to another within a financial year. Changes to the number of ministries or departments and their functions affect their respective budgets.

“In the event of such reorganizations, the National Treasury will give guidance to Ministries, Departments and Agencies (MDAs) on the necessary changes which will be required in both FY 2022/23 budget (which ends next June) and preparation of the FY 2023/24 and medium-term budget,” Mr. Yatani said.

The PFM Act 2012 requires Treasury CS to issue guidelines on medium-term expenditure framework by August 30, followed by the launch of sector working groups made up of accounting officers from MDAs on September 9.

“The preparation of the FY 2023/24 and the medium-term budget will focus on targeted intervention of economic recovery programme that aims to reposition the economy on an inclusive and sustainable growth path. These will be mainstreamed into regular programmes of the government to ensure smooth transition and continuous implementation of programmes,” said Mr. Yatani.

This means that the ministries will hinge their budget on plans set under the Jubilee administration.

President Kenyatta’s successor will have to tackle a surge in food and fuel prices triggered by the war in Ukraine, rising unemployment, and a mountain of debt used to finance development over the outgoing President’s 10 years in office.

A successful petition would annul the presidential election, requiring a fresh vote in the 60 days following the judgment. However, the 60-day timelines could be affected by calls to oust the IEBC commissioners, whose firing and replacement through a tribunal and vetting by MPs could take months taking the new polls to next year.

Under Mr. Yatani’s budget timetable, ministries have until September 21 to review and update projects for 2023/24 and prepare progress reports.

They are then required to develop medium-term budget frameworks outlining budget estimates and policy priorities and prepare a draft budget review and outlook paper (BROP) by end of September. The draft BROP must be approved by Cabinet by October 23 and submitted to Parliament four days later.

The MDAs have until the end of November to draft medium-term budget proposals, including views from the public and stakeholders, for submission to the Treasury on December 1 for fine-tuning through a consultative meeting with Cabinet secretaries and principal secretaries on December 6.

Preparation of the draft Budget Policy Statement, which provides expenditure ceilings, will also be done between December and February 14 when the documents should be tabled in Parliament.

Between March 3 and April 13 next year, the MDAs will be required to have completed draft budget estimates for Cabinet approval ahead of their presentation in Parliament by April 27 together with the Finance Bill.