President William Ruto has identified at least five key areas which his administration says that it intends to focus on as part of the Kenya Kwanza government’s economic transformation plan for the country.
A look at the budget for the 2023/24 Financial Year presented by the National Treasury in July, indicates that President Ruto’s administration wants to largely focus its attention on areas of infrastructure, agriculture, the social sector, governance and administration as well as on the environment to turn around the country.
According to the budget policy statement presented by Treasury cabinet secretary Njuguna Ndung’u, these areas are set to form a large part of the government’s economic agenda for the country in the next one year.
The plan also lists improved inclusivity – namely in areas touching on micro, small and medium enterprises, housing and settlement, healthcare, digital superhighway as well as the creative industry.
As such, an analysis of the budget indicates that the National Treasury, in its allocation, intends to disburse a bigger chunk of this year’s budget towards these programmes.
To this end, sectors such as infrastructure are expected to receive some of the highest allocation of about Sh250 billion which have been allocated to the ministry of roads.
A further Sh3 billion has also been allocated to complete the construction of 181 stalled markets that were initiated in 2008. Another Sh3 billion will also go towards the setting up of at least six EPZ Industrial Parks. This, the Treasury says, will help stimulate job creation, decrease post-harvest losses, enhance processing, marketing, and distribution of agricultural products.
Consequently, sectors such as finance will also receive the highest allocation of about Sh35.2 billion, while environment and public administration will both get Sh15.3 billion and Sh10.6 billion respectively.
“These five areas are expected to yield the most for the economy. The idea is to increase investment in five strategic sectors that have the largest impact on the economy,” Prof Ndung’u said.
Under the agricultural sector, the government says that it intends to spend some Sh49.9 billion to grow the sector. This will include about Sh8.6 billion that will go towards the national agricultural value chain development project and an additional Sh5 billion for the Fertiliser Subsidy Program.
Similarly, in the social sector, about Sh141.2 billion has been allocated towards health, with the universal health coverage programme receiving Sh18.4 billion.
Sectors such as education have also been allocated some of the highest figures, with about Sh630 billion allocated to the ministry of education, representing about 27.4% of the entire budget.
The funds, the Treasury argues, will be used to promote what it calls shared prosperity – by providing accessible and quality education to all Kenyans.
Of the funds allocated to education, about Sh25.5 billion is expected to go towards the junior secondary school capitation, while Sh5 billion will be used for the school feeding programme.
Allocations towards the Higher Education Loans Board, HELB, has also been doubled from Sh15 billion to Sh30 billion.
While tabling the figures before Parliament in July, Prof Ndung’u argued that the plan by the government is to reduce the cost of living by subsiding production, create jobs, improve social security, redistribute incomes more equitably and expand the country’s tax base.
This, the CS argued, is in line with the bottom-up economic transformation agenda as detailed in the 2023 Budget Policy Statement and the Fourth Medium Term Plan currently under development.
“Most allocations are strategically aligned with identified value chains to facilitate efficient distribution and utilization of resources.
“The value chains include leather, livestock (dairy and pastoralist economy), apparels and textiles, crops (edible oils, rice, tea and coffee), blue economy, mining and industrial production (construction and building materials),” Prof Ndung’u said.
The government is also banking on the Sh175 million Youth Enterprise Development Fund and the Sh182.8 million Women Enterprise Fund to finance small businesses. This is even as allocations towards the Hustler Fund and funding for SMEs also rose to about Sh10 billion and Sh300 million respectively.
On housing and settlement, the government says that it intends to build affordable houses which will in turn provide jobs to over 100,000 youths, with some Sh35.3 billion allocated for the housing programme.
Economist Wilson Wariari says that while the plans by the government are grand, the challenge may be on the funding, owing to the financial constraints that the government has alluded to in the recent past.
“The first challenge for the government would be on how to raise revenue and fill up the budget deficit. Another unintended consequence would be the sustainability of raising funds, moving into the future owing to constraints and economic shocks that the country and the global economy has witnessed over the past couple of months,” Mr Wariari said.
Email your news TIPS to Editor@nairobilawmonthly.com, and to advertise with us, call +254715061658 anytime of the day
