NAIROBI, Kenya – As the debate on the controversial Finance Bill 2024 intensifies, it’s important to understand the intricate process of budget-making in Kenya.
The budget-making process is a systematic and organized procedure guided by the 2010 Constitution and the Public Finance Management Act of 2012.
This process involves multiple stakeholders, including the Executive, Parliament, and the public, ensuring transparency, accountability, and good governance.
Initiation and Early Stages
The budget preparation process is initiated by the National Treasury Cabinet Secretary (CS).
It begins on August 30 when the CS issues a circular advising all government agencies on how to prepare the budget for the next financial year.
This step sets the stage for a collaborative and structured approach to national budgeting.
Review and Outlook
By September 30, the National Treasury submits the Budget Review and Outlook Paper (BROP) to the cabinet for approval.
The BROP provides a comprehensive review of the actual expenditure in the previous financial year and includes projections for the coming year.
This document is crucial for informed decision-making and strategic planning.
The BROP is then tabled in Parliament by October 21 and made public no later than November 5.
This transparency allows for public scrutiny and engagement, reinforcing the principles of open governance.
Public Participation and Policy Development
Following the submission of the BROP, the Treasury takes the budget policy through a phase of public participation before seeking cabinet approval in January.
Public participation is a key component, serving as a catalyst for transparency, accountability, and good governance.
It ensures that citizens have a voice in the budgetary process and that their input is considered in the formulation of fiscal policies.
Revenue Allocation and Policy Statements
In January, the Commissioner on Revenue Allocations submits recommendations on how much should be distributed to each level of government (national and county).
These recommendations inform the Division of Revenue and County Allocation of Revenue Bills, which are tabled annually in Parliament by February 15.
Simultaneously, the CS National Treasury tables the Budget Policy Statement and Debt Management Strategy in Parliament by February 15.
These documents outline the government’s fiscal policies and strategies for managing national debt, providing a framework for sustainable economic growth.
Final Budget Estimates and Legislative Approval
The national budget estimates are tabled in the National Assembly by April 30.
Alongside these estimates, the Finance Bill, which sets out the revenue-raising measures, is also presented.
These documents are critical as they detail the government’s spending plans and how it intends to generate the necessary revenue.
In May, the National Assembly conducts public hearings on the budget estimates.
This step allows for further public engagement and ensures that the budget reflects the needs and priorities of the citizens.
Following the public hearings, the Treasury CS presents the Budget Statement in Parliament, highlighting the revenue-raising measures in the Finance Bill.
This presentation typically occurs in mid-June, with this year’s budget being read on June 13.
Finally, the budget is expected to be approved by Parliament by June 30, which marks the end of the financial year.
This approval is crucial for the timely implementation of government programs and services.
The budget-making process is a comprehensive and inclusive procedure that involves multiple stakeholders and emphasizes transparency and accountability.
From the initial stages of budget preparation to the final approval by Parliament, each step is designed to ensure that the budget reflects the country’s economic priorities and meets the needs of its citizens.
