In brief
- The National Treasury published the FY23 Supplementary Budget documents last week, which will be tabled in the National Assembly today (14 February, 2023).
- Subsequently, the Budget & Appropriations Committee will table its recommendation report before a Supplementary Appropriations Bill is introduced and approved by the National Assembly
- The FY23 Supplementary Budget was presented to the Cabinet at the end of January 2023, in line with the IMF programme’s structural benchmark
- Although President Ruto had hinted at an ambitious KES 300.0bn slash in budget spending by the national government, the published documents show a modest KES 13.3bn reduction in spending by the national government
- While there is still policy inertia around the unsustainable fuel subsidy, the government is weaning its extraordinary support to two SOEs; Kenya Power and Kenya Airways.
- Although the undisbursed KES 29.6bn as equitable revenue to counties portends some legal challenges, we do not see the bicameral Parliament making a big fuss out of it.
- The fiscal deficit target in the revised FY23 budget narrows from 6.2% to 5.7%, but we opine this is cosmetic based on an ambitious upward FY23 nominal GDP revision
- We are likely to see investors piling up on duration as the presumed KES 300bn spending cut, hitherto government’s open mouth operations, has not materialized in the FY23 supplementary budget.
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