Budget focuses on strategic sectors to develop country

twitter@MachelWaikenda

National Treasury Cabinet Secretary Henry Rotich presented the Jubilee Alliance’s second trillion-shilling Budget statement on Thursday.  This Budget will serve as the Government’s national economic policy blueprint for the next financial year. But the budget policy as presented is a mere plan — a projection of things to come.  It is a statement of milestones and possible cost of getting the country’s economy from one milestone to another. However, how well it will be implemented will be the subject of debate in the next 12 months.

Although Treasury proposed Sh1.769 trillion for its 2014/2015 Budget, the Budget and Appropriations Committee in Parliament adjusted this to Sh1.779 trillion.  Notably, this Budget was read during a period of sluggish economic prospects triggered by rising insecurity, high cost of living and slow performance of key sectors such as agriculture, tourism and manufacturing.

The   2014/15  Budget is expected to accelerate economic growth, but the    level of growth will depend on increased production in agriculture, continued investments in infrastructure, energy, building and construction, manufacturing, retail and wholesale and financial intermediation.

A significant amount has been set aside to boost security to promote investment, spur growth and boost employment. It is projected that the economy will grow by 5.8 per cent in 2014, rising to 6.4 per cent in 2015.

Some of the biggest spending is going to priority areas that should spur growth. This includes  Sh116.7 billion  set aside for  roads, Sh43.6 billion for energy, Sh53.3 billion for agricultural services, Sh1 billion for an agri-business seed fund and Sh9.5 billion for expansion and construction of irrigation projects.

The Exchequer has tried mitigate against growing poverty by promoting   equity through a social protection safety net in the form of cash transfers. However, the increase of this allocation must be matched by initiatives reduce over-dependence on the taxpayer. These initiatives should aim at helping people become self-reliant.

Access to health has been a burning issue and the Government has allocated Sh10.5 billion for free access to primary health care in dispensaries, maternal healthcare and leasing medical equipment.

The creation of jobs is important and the Exchequer must continue to invest heavily in measures that open up employment opportunities. The Sh3 billion set aside for the development of textile and leather sectors   is welcome but not significant enough to revive this sector.

The amount allocated to county governments has been increased to Sh226.7 billion, while    Sh33.4 billion has been set aside for regional development, of which Sh27.97 billion is for CDF, Sh2.03 billion for Affirmative Action for Social Development and Sh3.4 billion for the Equalisation Fund.

But to achieve all these targets in 2014/2015, there must be significant cuts to national government expenditure on travel, hospitality, advertisement, transfers to semi-autonomous agencies, and other administrative payments.

This must also be extended to county governments, which   like the national government, have been allocating more than half of their budgets to pay salaries and meet other recurrent needs.

The Exchequer   projects a deficit of 7.4 per cent of GDP for 2014/15, declining to 5 per cent by 2016/17.  It is also projected that the net Public Debt to GDP ratio will decline from 52 per cent at the end of this year to 49.8 per cent in 2016/17.

However, it is significant   that Exchequer has not indicated how    more revenue can be collected domestically to address the deficit and debt. We must thus kick off an all-inclusive national conversation on how we will raise more money needed for national programmes.

The writer is a political analyst and communications consultant