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A to Z of the Budget: Of bitter bread, JSS debate and hustlers left by the wayside

Trader Prudence Sintoyia in her boutique. [Amos Kiarie, Standard] 

A for Afcon 2027. Kenya and football in one sentence sometimes sound like a serious overreach, but the country will be rushing to get facilities ready for the 2027 African Cup of Nations, which the country co-hosts with Uganda and Tanzania.

As such, the Permanent Secretary for the State Department for Sports, in conjunction with Sports Kenya, is required to submit to the National Assembly “clear resource requirements and funding options” for each stadium and training grounds earmarked for upgrading and construction. Afcon is expected to boost local business and expenditures to lay ground for it are already being discussed in the Budget.

B for bread. In the Finance Bill, 2024, gluten bread and unleavened bread have been proposed for moving from exempt to taxable, which means higher costs to consumers. Transportation of sugarcane from farms to milling factories could also move from zero-rated status to taxable status, therefore increasing the cost of sugar. A bone of contention, proponents have argued that bread and sugar are for the middle class, but this increase has received widespread criticism from across the social strata. 

C for county allocation. The devolved units have been allocated Sh446.1 billion, an increase from last year’s Sh429.7 billion. For counties whose own-source revenue has been on the rise such as Murang’a, the deficits will shrink even further.

D for distractions. Amid serious deliberations after the tabling of the Bill by the chairperson of the Finance and National Planning Committee Kimani Kuria on May 13, an array of political shenanigans, often from the same political faction, have come in thick and fast, shifting discussions from the main agenda. Before Kenyans realize it, the Bill has proceeded with all the contentious issues. The political drama seems nicely choreographed and Kenyans would do well to focus on what is most important.  

E for expenditure Total gross expenditure is projected to be Sh3.91 trillion, around 21.8 per cent of the GDP. In comparison, expenditure for 2023/2024 was put at Sh3.60 trillion, or 22.1 per cent of the GDP. This year’s expenditure approximations come after the rationalising of the original estimates, which were at Sh4.19 trillion.  

F for fiscal deficit. The fiscal deficit is projected at 2.9 per cent of GDP in 2024/2025 and 3.3 per cent of GDP for the next two years. This is a revision from the target of 3.9 per cent of GDP following what the National Treasury cites as challenges in resource collection this financial year. 

G for greener pastures. President William Ruto has been promising that he was negotiating for jobs in other countries to increase remittances sent back to the country. He has talked of a goal of $10 billion per year. On the other hand, he is seeking to attract more foreign direct investments (FDIs) and is trying to make investors see Kenya as a greener pasture. Green here, green there, green everywhere.

H for hinterlands. Amid raging debate on what part of the country needs what allocation for what levels of development, the National Treasury proposes the county governments to be allocated Sh7.8 billion from the Equalisation Fund to finance development projects in marginalised areas. As usual, as perspective overtakes fact, debate will be on who deserves what, and what every man defines marginalisation as.

I for immigration. Following an outpouring of grief from Kenyans frustrated at the Immigration desks due to delays in issuance in passports (as they go to seek the promised green pastures), allocation to the Immigration and Citizen Services Department has been increased by 20 per cent of all the revenues it generates for the Exchequer through issuance of documents. The department will be allowed to use appropriation in aid amounting to Sh3.9 billion. Kenya wants to fund a seamless processing of passports, identity cards, birth and death certificates.

J for junior secondary school capitation. With the brutal tug-of-war between government and JSS teachers, the government is keen to pump more resources to streamline the new curriculum and probably boost teachers’ compensation. JSS will receive a Sh30.7 billion allocation, with free day secondary school programme receiving Sh63.9 billion.

K for Kenya Kwanza. Is Kenya at the top of the priority list? Is the government keeping to its campaign promises? Are Kenyan hustlers being treated with the dignity they were promised? What of the tax regime? The house demolitions that seem to be targeting high-density, houses where the low class live? Lack of accountability by top officials and general wastefulness by the custodians of public coffers? Is it still Kenya Kwanza?

L for lion’s share. Forget the notion that all three arms of government are equal; some animals are more equal than others. The budgetary allocation to the Executive arm of Government in the amounts to Sh2.24 trillion, while the Legislature gets Sh43.6 billion and the Judiciary Sh23.7 billion

M for monetary policy. To contain inflation, the Central Bank of Kenya raised the Central Bank rate to 13 per cent in February. This was meant to reduce borrowing, and to therefore limit spending, maintaining price stability consistent with Kenya’s inflation target of between 2.5 and 7.5 per cent.

N for no-holds barred. Rather too soon, cracks have started showing between President William Ruto and his deputy, Rigathi Gachagua. From either side, the politicians have gone for one another’s jugular in what is uncannily similar to the experience in the UhuRuto government. By the time the first round is gone, the ring could have casualties, and Kenya suffers in the process. Focus is on the wrong thing- the bloody war- and no real progress will come with the infighting in government.

O for obsolescence. The Ministry of Defence, in the 2025 Budget Policy Statement, is required to outline its plan in leasing of equipment and systems it uses because rapid change of technology makes them obsolete before the end of their useful period. All loopholes towards wastefulness need to be sealed, and, a wake-up call, Kenya needs to work harder towards advancement in technological uptake than it is already doing.  

P for profligacy. That jet to the US and the debate around it comes to mind. The President came to power on the back of promising to oversee austerity and to ruthlessly crush wastefulness. Nearly two years later, questions have been asked about his regular trips abroad and insistence on keeping Chief Administrative Secretaries (CAS), declared illegal by courts. Lack of taking deliberate action on appointees adversely mentioned in corruption cases have also led to questions on the desire to curb wastefulness.  

Q for quintessential budgeting. There needs to be cutting of excesses and removal of any room for overshooting expenditures, which would create room for theft. With Kenyans on the back foot following heavy taxation, it is crucial to make sure that every figure suggested for collection and allocation is as accurate as possible to save the taxpayer from sinking their hard-earned money into pits, nay pockets of pilfers in public service.

R for revenue. In 2024/25, revenue is projected to be Sh3.35 trillion. Last year, the total revenue, including Appropriation-in-Aid, was projected at Sh2.89 trillion (17.8 per cent of GDP). Kenya Revenue Authority keeps scanning to see possible ways to increase collection, and the government is daily exploring ways to widen the tax base. More revenue, more allocation with every passing year.

S for subsidy. Coming to power in 2022, the Kenya Kwanza government promised to cut down consumption subsidies and to, instead, subsidise production. So it has been. For 2024/25, the fertiliser subsidy programme will get Sh10 billion. There has been a fertiliser scandal before and Kenyans will be hoping that that was a one-off.

T for transactions. There is a risk for Kenyans to ditch MPesa for cash, and banks for the mattress. Finance Bill, 2024, has proposed an increase of VAT from 15 to 20 per cent on fees charged for money transfer and services by bank, agencies and other financial service providers. As Kenyans incur a higher cost for sending and receiving money, particularly for smaller transactions, many could revert to using cash, therefore undoing the progress made in the past many years.

U for unicorns. Startups come and go, often due to finding the market difficult, the environment harsh. Kenyans has always seemed very close to its first unicorn, being one of the key countries for startups in Africa alongside Nigeria and South Africa. However, an ever-increasing burden of taxes keeps on hurting startups chances.

V for vehicle tax. Congratulations on buying your new car! Now give to Caesar some more. Among the proposed taxes is the highly debated Motor Vehicle Circulation Tax at the rate of 2.5 per cent of the value of the car. Payable at the time of issuance of insurance cover, this tax is between Sh5,000 and Sh100,000. The value of the vehicle, stipulates the Bill, is to be determined on the basis of make, model, engine capacity in cubic centimetres and year of manufacture.

W for weak public investment policy framework. While the government envisages mobilising tens of billions of shillings from 37 public private partnership projects in 2024/2025, the country’s public investment policy framework is weak, argues the National Treasury, and cannot comprehensively guide implementation of all commercially viable infrastructure projects. Still, Kenya expects to collect Sh70 billion in the year.

X-raying public servants. Probably the third time in this article, but Ethics and Anti-Corruption Commission should look even harder into public servants’ accounts to ensure there is not one coin straying into the wrong account. Kenyan hustlers should not keep funding a few gluttonous public servants.

Y for yoke of punitive taxes. As views came in following the call for the public to participate on the Finance Bill, one thing was clear. Individuals and organisations all decried the increase in taxes. Businesses threatened to close. Manufacturers fear they might be pushed out of business. People are already on their knees. The message has been clear for sometime, and the regime should consider alternative ways of financing operations.  

Z for zoned out. The phrase “kwa ground mambo ni different” became so commonplace it no longer seems to carry the weight it seemed to when it was newly manufactured. But analysts are warning the government, which rode to power on a manifesto promising to keep in touch with the common man, could face the wrath of a people whose plight it has since forgotten. Promises on the campaign trail have not been kept, and it has started to appear like the government has lost touch with the ground.

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