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State to spend more than Sh30 billion on food crisis

By | February 24th 2009 at 00:00:00 GMT +0300

By Macharia Kamau and Reuters

A starving nation, the global financial crisis, and the need to increase spending on infrastructural projects are among the challenges the Government is facing in its next Budget.

Finance Minister Uhuru Kenyatta said yesterday the Government was planning to spend in excess of Sh30 billion between now and August to address the prevailing food crisis. "To address the food shortage, the Government plans to spend around Sh10 billion on maize imports and another Sh22 billion on other necessary interventions to support the 10 million people requiring famine relief intervention," said Uhuru.

In addition, the Government will need to raise Sh17.3 billion in three phases to increase teachers’ pay.

"We are preparing the Budget against a backdrop of internal and external challenges," he said. Uhuru was speaking at a pre-Budget hearing at the Kenyatta International Conference Centre.

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decline in demand

"Indications are that the world economy is to grow by one per cent this year. There are real risks to our economy, as demand by developed economies for our goods and services are likely to decline," he said. Last year’s post-election crisis has also contributed to a lower economic growth rate. Other external factors — drought and exceptionally high oil prices — caused even more damage.

Last year, the Government had forecast growth of around 4.5 to six per cent, before lowering its estimate to 3.5 to four per cent.

To bring back the economy to a higher growth rate, the Government has to tap more of domestic resources.

food crisis maize imports
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