Uhuru stakes future on long-term plan

The budget was based on maintaining a stable macroeconomic environment, developing key infrastructure, promoting equitable development, investing in environment and food security and strengthening governance

A rising tide lifts all boats,” goes the saying. This is essentially the philosophy of the Kenya Budget 2009.

In the face of a firm commitment to a medium to long-term plan, there was little or no room for short-term, knee-jerk responses to current stimuli, although there was certainly a great temptation to do so.

The country’s future is in the hand of its long-term plan. And so the new Minister for Finance passed his first test; that of constancy of purpose.

Uhuru Kenyatta used the precise language of the 2008 budget strategy paper, issued a year ago; and explained that his framework for the budget was based on maintaining a stable macroeconomic environment, developing key infrastructure, promoting equitable development, investing in environment and food security and strengthening governance.

In his paper titled Overcoming Today’s Challenges for a Better Tomorrow, he made some points clear that some analysts and budget watchers had struggled with: “Raising taxes,” he said, “was not a prudent option under the current circumstances.”

The plan is to bring inflation down to 5 per cent — as stated in the Budget Outlook Paper issued in January this year.

Borrowing Ksh109 billion ($1.39 billion) from the domestic market will not crowd out private-sector borrowers, the worry that many have expressed already; our debt-to=GDP ratio, currently at 40 per cent is entirely manageable without risking short-term economic stability.

And the government is not keen on making tax adjustments on essential commodities that traders just suck up and fail to pass on to wananchi.

Mr Kenyatta then went on to make what he described as “bold” decisions. They hardly seem bold to observers outside government, although they certainly have a refreshing air of difference about them.

He cut back expenditure on various non-essential government procurements such as furniture, introduced fuel cards for government vehicles and restricted public servants to cars whose engine capacity did not exceed 1,800 cc.

This explained his arriving in a Volkswagen Passat, a car that, though eminently competent, certainly does not have the same cachet as the limousines in which his colleagues were conveyed to Parliament.

It’s a long overdue, but not really “bold” move.

More importantly, however, it is one that sets the right tone of earnestness in a government that has previously shown unbelievable chutzpah, arriving by helicopter or gliding in in gleaming 4WDs to inspect the latest scene of human suffering on several occasions during the past year.

He promised that no public official would be exempted. The proceeds on sale of the juggernauts hitherto in use will be used to further defray the costs of resettling internally displaced people.