Kenya releases 2018/19 budget estimates of eye-popping $31b

Monday June 11 2018

Kisumu oil pipeline jetty. NMG

Large infrastructure projects such as the Kisumu oil pipeline jetty are expected to spur job creation and regional trade. PHOTO | NMG 

By JAMES ANYANZWA
More by this Author

Kenya has tabled the budget estimates for its 2018/2019 fiscal year with the focus on laying a strong foundation for the achievement of President Uhuru Kenyatta’s grand plan of creating jobs, reducing poverty and inequality and improving the general living conditions of the citizens during his final term in office.

Last week Kenya’s parliamentary budget committee recommended an increase in the cash positions of key institutions responsible for fighting graft, maintaining security and auditing spending of public finances as part of efforts to improve governance and reduce the cost of doing business in the country.

The committee chaired by Kikuyu MP Kimani Ichung’wah also recommended an upward revision in the budgets of the Ministry of Energy, State departments of Housing, Infrastructure, Irrigation, Agriculture and Research.

Expenditure pressure

The Jubilee administration is seeking to take measures under the Agenda Four to boost manufacturing, enhance food security, create affordable housing and achieve universal health coverage to boost growth, create jobs and ultimately promote inclusive growth.

As a result, the government has prioritised programmes and reforms to be implemented over the next five years (2018-22) to achieve the grand plan which will also form part of the legacy of President Kenyatta’s administration.

But faced with mounting expenditure pressure and falling revenue collections National Treasury Cabinet Secretary Henry Rotich has extended an olive branch to the private sector to implement the mega infrastructure projects under the Big Four Agenda jointly.

On June 14, Mr Rotich will announce the taxation measures he intends to take to fund a record Ksh3.07 trillion ($30.7 billion) budget for the 2018/2019 fiscal year compared with Ksh2.6 trillion ($26 billion) in the current fiscal year, which will include borrowing an additional Ksh562.74 billion ($5.62 billion).

Kenya’s debt burden estimated at over Ksh4 trillion has been an issue of concern to the parliamentarians and to the international financial institutions such as the IMF and the World Bank.

This year, debt-related payments (interest and redemption payments) alone amount to Ksh870.6 billion ($8.7 billion).

According to the budget estimates tabled in parliament last week the Budget committee recommended an additional Ksh1.25 billion ($12.5 million) to be allocated towards the strategic initiatives of the Agenda Four under the sub-programme budget formulation, coordination and management while Ksh75 million ($750,000) be allocated to the Ethics and Anti-corruption Commission for the acquisition of headquarters and operating expenses.

An additional Ksh30 million ($300,000) has be allocated towards construction of police housing in the state department of Interior while Ksh200 million ($2 million) allocated to the Office of the deputy inspector general Kenya Police Service’s policing services programme.

An additional Ksh100 million ($1 million) has been allocated for criminal investigation services while am extra Ksh8.7 billion ($87 million) allocated for the repair of the infrastructure destroyed by recent flooding.

The Office of the Auditor General will receive an additional Ksh1 billion ($10 million) to cater for personnel emoluments, outsourcing of audits and other consultancies bringing its total allocation to Ksh6 billion ($60 million).

Conducive environment

Kenya hopes to maintain its investments in programmes that will create a conducive business environment for investment and job creation and provide 500,000 affordable housing units to the poor.

Investments in the Big Four areas are expected to transform lives by creating much-needed jobs for Kenyans, improve living conditions, lower the cost of living and reduce poverty and inequality.

A total of Ksh68 billion ($680 million) has been allocated to the State department for Energy, with Ksh13 billion going towards power generation and Ksh53 billion ($530 million) towards power transmission and distribution.

The state department for Irrigation will receive Ksh17.97 billion ($179.7 million) while Ksh5.56 billion ($55.6 million) will go to the state department for Agriculture and Research.

Industry has been given Ksh6.91 billion ($69.1 million) while the National Intelligence Service gets Ksh31 billion ($310 million).

Others are Ksh24 billion ($240 million) towards ICT infrastructure development, Ksh2 billion ($20 million) to youth training and development, Office of the Director of Public Prosecutions Ksh2.91 billion ($29.1 million), Ethics and Anti-Corruption Commission Ksh2.92 billion ($29.2 million) and Ksh32 billion ($320 million) to the department for housing, urban, development and public works.

Domestically, the economy is exposed to challenges such as adverse weather conditions and public expenditure pressures, especially recurrent expenditure.