Key projects in last year’s Budget yet to be initiated

Six major projects promised last year have not taken off, even as Deputy Prime Minister Uhuru Kenyatta prepares to deliver this year’s Budget.

They include construction of a fertiliser factory and a wholesale market for fresh produce in Nairobi which were meant to help fight poverty.

The good news is that many other promises by the then Finance minister Amos Kimunya, now Trade minister have been met, including creating funds for women and the youth.

But the government’s main success has been in the reconstruction of roads, notably the major highways to Nakuru, Mombasa and Namanga.

Bureaucrats said part or whole sums of the project cash had been reallocated.

For instance, Mr Kimunya had proposed the building of a Sh900 million Business Process Outsourcing Park by the Information ministry to create 10,000 jobs annually. The project has not taken off.

Permanent secretary Bitange Ndemo said the government took back Sh500 million, thus stalling the project.

Budget reallocation is a normal exercise at the Treasury, to ensure key programmes are given priority. Money for some projects is said to have been diverted to the famine which hit sections of the country.

The Information ministry used the balance to pay deposit for 5,000 hectares of land at Nairobi’s Kitengela for the project. Dr Ndemo now expects the Treasury to allocate more cash for the programme.

Treasury permanent secretary Joseph Kinyua described as very encouraging the level of implementation of projects proposed in the last Budget.

Economic growth, reduction of poverty and job creation were the themes of last year’s Budget. Development of infrastructure and power supply were identified as key drivers of growth and job creation.

Similarly, according to last year’s Budget, the government was to establish industries along Lake Victoria to manufacture leather items from fish products.

The factory was supposed to benefit Nile perch fishermen mainly in Mbita, Kisumu and Migori districts.

But Fisheries Development minister Paul Otuoma said there had been no progress on the proposal because the Treasury did not release required funds.

And, Mr Kinyua is doubtful whether ministries whose funds were diverted will get more money in the Thursday Budget.

“We have so many demands this coming financial year such as teachers’ salaries among other demands. There are calls to allocate more funds to sectors that contribute directly to economic growth. This is making it difficult for Treasury in terms of resource allocation,” he said.

Perhaps one of the greatest setbacks to the last Budget was refusal by MPs and some constitutional office holders to pay taxes on their allowances.

They threatened to block the approval of key ministries’ votes if plans to tax their income were not shelved. The status quo was maintained – they pay taxes on their salaries but not allowances that constitute the biggest portion of their pay.

Poverty reduction

Nevertheless, there is remarkable progress on some projects, especially road works. In the last Budget, Treasury allocated Sh65 billion for roads with a focus on the Mau Summit-Kericho-Kisumu, Athi-River-Namanga and Thika roads. 

President Kibaki and his Tanzanian counterpart Jakaya Kikwete last month launched the $140 million Arusha-Athi River road reconstruction project. The 243-kilometre road, via the Namanga border, is being rehabilitated through a loan from the African Development Bank. It is expected to be completed by mid 2011.

Mr Kimunya had set aside Sh400 million for construction of the Garissa-Hola Road. The contract has been awarded. The size of Kenya’s road network is estimated to be 177,500 km.

The poor state of the road infrastructure has been identified as a major constraint to economic and social development.

An engineer at the Ministry of Roads, Mr Gilbert Arasa, said contractors for Thika Road had embarked on the Sh26 billion expansion project while construction of the Mau Summit-Kericho-Kisumu Road is ongoing. The government has already raised Sh18.5 billion from infrastructure bonds issued in February.

The major winners in the last Budget are youths and women who have received a cash boost from the Treasury.

In his Madaraka Day speech, President Kibaki said the government had strengthened the Youth Enterprise Development Fund to the tune of Sh2.3 billion.

He said the fund would be increased to Sh5 billion in the next three years. The President said the government had injected an extra Sh500 million to the Sh1.2 billion women fund, making it Sh1.7 billion.

Fertiliser factory

But some pledges remain just that – promises. The most notable is the fertiliser factory which was supposed to be a joint effort of Kenya, Uganda and Tanzania. Two weeks ago, Agriculture minister William Ruto told Parliament that talks on the setting up of a regional fertiliser factory were at an advanced stage. The plant would ensure constant supply of the commodity and reduce dependency on imports.

Another example is the construction of a fresh produce market in Nairobi, which is yet to kick off.

The planned privatisation of the National Bank of Kenya where the government was to offload 20 per cent stake was blocked by the National Social Security Fund.

To create jobs, the former Finance minister had talked of plans to modernise the port of Mombasa. Some Sh430 million was allocated for dredging of the port to allow bigger ships to dock. The government has since launched a 24-hour operation at the port.

Still on jobs, the Treasury set aside cash for employing 600 nurses who had been working on contract as well as hiring of an additional 1,000 to narrow the shortage.

Medical Services permanent secretary James ole Kiyiapi said the ministry had 17,000 nurses and needed an extra 18,000 to meet the World Health Organisation requirements.