The financial plan (2018/2019) will be presented to parliament tomorrow by Treasury Cabinet Secretary, Mr. Henry Rotich
Every Kenyan is eagerly awaiting the finer elements of the budget
The financial plan (2018/2019) will be presented to parliament tomorrow by Treasury Cabinet Secretary, Mr. Henry Rotich. The budget is expected to outline how the government plans to implement its Big Four agenda; Food security, Affordable Healthcare, Manufacturing and Housing.
Every Kenyan is eagerly awaiting the finer elements of the budget. They want to know whether life will get easier or they will have to "tighten their belts."Political events have troubled the economy albeit it's picking up...thanks to political truce. It is rumored that it's a three trillion shillings plan. Below are some of the elements of the 2018/19 budget that will be of great interest to Kenyans;
1. Necessities prices
Affordability of basic commodities is dear to many Kenyans. Such commodities are maize flour, wheat flour/bread cooking oil, sugar, milk etc. Any taxes imposed on the production/acquisition process of these commodities will lead to an increase in their prices. Kenyans are anxiously waiting of the outcome of this financial year's budget making process in terms of impact on the prices of basic commodities. Exorbitant cost of these basic items could lead to protests as well as a decline in the popularity of the government of the day.
2. Custom duty
Import and export duty are some of the government's revenue earners. The trade has grown over the years meaning the revenue has proportionately increased. Kenyans in the international trade will be keen on the import and export taxes. Currently the custom duty for various items range from 0% to 25%. The traders hope that the government will reduce duty for majority of the items. This will reduce their cost of doing business hence increase their margins.
3. Manufacturing costs
The manufacturers will be interested to know whether the economic guidelines outlined in the financial plan have impact on their direct materials cost, direct labor overheads and direct expenses. Any increase in any of the costs (ceteris paribus) will lead to an increase in the prices of final products and vice versa... weight that will be felt by the consumers.
4. Disaster management Kitty
In the recent years, the country has been hit by calamities of various nature and magnitude. The disasters range from floods, hunger, disease outbreaks to collapsing of residential houses. Government has been blamed for lack of preparedness and being reactive to calamities whenever they strike. Kenyans hope that there will be a kitty set aside to resolve disaster.
5. Fuel prices
Kenyans hope that the government will cut excise duty of petrol, diesel and kerosene. Looking at the size of the budget it's unlikely that fuel prices will come down bearing in mind that the government will leverage on every opportunity in a bid to mobilize revenue to fund this huge budget.
6. Health services betterment
Health is a critical element in a society. Without good health, society can't achieve good wealth...people with I'll health are not productive. Kenyans are looking forward to a financial blueprint by the government on how to equip hospitals with state of the art facilities that will help treat various diseases. For instance a plan to acquire a dialysis machine or a Linear Accelerator (LINAC) machine in every county hospital to treat cancer. In line with the Jubilee Government Big Four agenda (affordable healthcare), Kenyans will expect the exchequer to outline how the government plans to execute the health scheme financially. This includes National Insurance Health Fund, Pre/Post natal care, health insurance etc.
Considering the revenue mobilization element, it's unlikely that price reduction expectations will be met given the fact that government has to maximize on revenue earning. Progressive plans in line with the Big Four will be captured in Henry Rotich's presentation. Corruption must be dealt with conclusively in order to realize the vision of such an ambitious financial plan (3 trillions shillings).
Charles Muchangi Bazenga
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