Budget Brief No. 33 – Parliament and National Treasury: How are They Playing Their Roles in Kenya’s New Budget Process?

Publication Type: Budget Briefs

The 2010 Constitution of Kenya and the Public Finance Management Act, 2012 (PFM Act) significantly altered the roles that Parliament and the National Treasury should be playing in Kenya’s budget process. Parliament (particularly the National Assembly) is now expected to play a larger role in budget decisions. While the National Treasury retains a major role in agenda-setting, it must now position itself to be able to sell its budget proposals.

This brief examines how the National Assembly and Treasury interacted during the formulation and approval of Kenya’s 2015/16 budget to determine how they are adapting to these new rules.
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Key findings:

  • Despite the expansion of Parliament’s role, the major aspects of the 2015/16 budget were largely unaffected by the National Assembly’s changes.
  • In March, the National Assembly amended Treasury’s proposed Budget Policy Statement to direct more funds to Parliament itself and, to a lesser extent, other oversight institutions (such as the Office of the Auditor General). This increased the deficit by a modest amount.
  • While the Budget Policy Statement agreed to in March should have established the total size of the budget, Treasury did not respect this and increased spending by approximately Ksh 74 billion in its budget estimates tabled in Parliament in April. The National Assembly did not respond substantively to this violation of the Budget Policy Statement and approved the larger deficit in June.
  • The National Assembly and the National Treasury both failed to provide informative justifications for the changes that they made as they moved through the budget-making process between February and June. This makes it impossible to understand the priorities of either actor, or how they incorporate (if they do) public inputs into the budget process.