Budget Review and Outlook Paper 2019

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On Sep 2019 Kenya National Treasury published a budget review and outlook paper (BROP). This is a public document which reviews how the national government spent and raised resources in the previous financial year and what it plans to do in future.

In the Foreword section of the BROP, the Cabinet Secretary for Finance, Ambassador Ukur Yatan is speaking about Kenyan economy oscillating around 5.6% which makes me wonder whether he is aware that the Vision 2030 has a goal of pushing the Kenyan economy to what Dr. William Ruto calls a double digit economy. This basically means that our economy should grow at the rate of 10 percent per year. If we do not hit this target in the next 10 years then I will consider the economic pillar of our Vision 2030 a big failure.

The BROP informs us that the government of Kenya plans to continue focusing on the Big Four Agenda. If this is your first time to hear this alien concept, let me bring you to speed. The “Big Four Agenda” is all about achieving Universal Healthcare Coverage, providing 500,000 affordable and social housing units, achieving food security and making sure that manufacturing contributes more to Kenya’s Gross Domestic Product aka GDP.

The Public Finance Management (PFM) Act dictates that the National Treasury shall prepare and submit to the Cabinet for approval by 30th September every year the Budget Review and Outlook Paper. The 2019 BROP looks into how Kenya performed in FY 2018/2019 and provides projections for 2020/2021.

In 2018/2019, Kenya did not perform well in both revenue collection and expenditure. In total Ksh. 1.6 trillion was collected. This was below the target by a whooping Ksh. 123 billion.

By June 2019, a total of Ksh. 2.4 billion had been spent against the target of Ksh. 2.5 trillion. The Ministries, Departments and Agencies commonly referred to as MDAs recorded lower absorption in both development and recurrent budgets.

The national government plans to continue with tax reforms and administration in FY 2020/2021 in order to achieve better outcomes.

It is true that the Kenya National Treasury is projecting that the economy will grow by 5.9 percent and the growth will expand further in 2020/2021 to 7 percent. It is predicted that this growth will be as a result of massive investments in the Big Four Agenda.

However, I have to state that things on the ground are different unless quick action is taken by those with decision-making powers. We need to invest in sectors of our economy which can create jobs and stir the economy of the ordinary man. For instance, the state should do everything to protect tea farmers from the errors made by the Kenya Tea Development Authority (KTDA). Failure to do so will lead the Kenya tea sector down the drain the coffee sector way. Cartels in the tea sector are milking the poor farmers dry.

The other crops are not spared either. Most recently we saw on local media how maize farmers were lamenting the poor economic practices through flooding the local market of maize from as far as Mexico.

Things ni different kwa ground!!!!!

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Editor-in-Chief

Geoffrey Kerosi, economic and public policy analyst based in Nairobi City. Email: geoffrey@kerosi.com. WhatsApp: +254713 639 776 YouTube: Kerosi TV

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