NAIROBI, KENYA – 2020/06/11: Kenyas National Treasury and Planning Cabinet Secretary, Ukur Yatani with the budget briefcase before leaving to Parliament for budget reading 2020/2021. The budget worth Kenya Shillings 3.2 Trillion seeks to jump start an economy ravaged by the Covid-19 pandemic. (Photo by Billy Mutai/SOPA Images/LightRocket via Getty Images)

NAIROBI, Feb 2 (Reuters) – Kenya plans to spend an extra 108.5 billion shillings ($956.7 million) in the fiscal year to end June, the finance ministry said, a move that will raise the fiscal deficit to 8.1% of gross domestic product from the initial target of 7.5%.

The extra expenditure will go towards tackling a drought which has hit parts of the country, security and a general election that is scheduled for Aug. 9, the finance ministry said in a supplementary budget seen by Reuters on Wednesday.

If parliament approves the proposals, the national carrier Kenya Airways will get 26.56 billion shillings in new allocation.

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The government is injecting $473 million into the ailing airline this fiscal year and next, the Treasury said in December, and will take over $827 million of its debts.

Power distributor Kenya Power will also get 1.7 billion shillings, while 24.7 billion shillings will go towards a fund aimed at cushioning consumers against rising fuel prices by subsidising oil importers, the proposed budget showed.

Lawmakers will have to vote to approve the proposal, or ask the finance ministry to adjust its spending plans.

Finance Minister Ukur Yatani will present the July 2022 to June 2023 spending proposals to parliament next month, after the government brought forward the budget-making process due to the August election.


($1 = 113.4500 Kenyan shillings)

(Reporting by George Obulutsa; Editing by Duncan Miriri and Jan Harvey)