Kerosi Blog

Kenya budget 2020/2021

Key Highlights

By: Geoffrey Kerosi (Policy and Budget Analyst)

Background

• Total approved budget estimates for FY 2020/2021 is Ksh. 2.79 trillion;
• Recurrent expenditure will be Ksh. 1.254 trillion
• Development expenditure = Ksh. 633.1 Billion;
• Interest payments and pensions = Ksh. 586.5 billion;
• Counties will receive Ksh. 316.5 billion; Budget deficit = Ksh. 840 billion;
• Gov’t of Uhuru Kenyatta has an 8-point economic stimulus programme; – 1) improve roads, 2) education, 3) enhance liquidity, 4) improve health outcomes; 5) Agric and food security; 6) tourism recovery; 7) improve WASH; 8) supporting manufacturing;
• Budget deficit(domestic financing – Ksh. 493.7 billion); programme support – Ksh. 152 billion; project loans – Ksh. 250.5 billion; Crowding out effect;

The Big Four Agenda

President Uhuru Kenyatta’s Big Four Agenda has been allocated resources as follows:

A) Food Security = Ksh. 52.8 billion;

B) Housing = Ksh. 6.9 billion;C) Manufacturing = Ksh. 18.3 billion;

D) Universal Healthcare Coverage = Ksh. 50.3 billion;

Covid-19 Responses

a)People earning Ksh. 24,000 and below will benefit from 100% tax relief;

b)Corporate Tax was reduced from 30% to 25% as an incentive to business to retain staff;

c)VAT has been reduced from 16% to 14% to boost liquidity in the economy;

d)Pilot cash transfers of Ksh. 1,000 to vulnerable households in Nairobi County via MPESA for Kasarani, Mathare, Westlands, Kibra, Langata, Dagoretti etc;

Supplementary Budget II FY 2019/2020

1)Ksh. 13.1 billion for clearance of pending bills;

2) Ksh. 10 billion for settling outstanding VAT Refunds;

3) Ksh. 10 billion for cash transfers to vulnerable persons;

4) Ksh. 5 billion to support counties response to Covid-19;

5) Ksh. 1 billion  for hiring additional health personnel;

Covid-19 Responses in FY 2020/2021

1)Ksh. 10 billion allocated for Kazi Mtaani Program targeting 100,000 unemployed youth;

2)Ksh. 5 billion for rehabilitation of access roads;

Source: 

Budget Statement FY 2020/2021 

Budget Highlights FY 2020/2021