What small businesses should expect from the new Budget

THE BUDGET SPEECH was read last week.

I ran through it to see what could be in it for SMEs.

I am, however, still disappointed that the government is always ready to read the Budget and never to give a report card on whether the last budget had the desired economic impact.

As we know, there is the Budget, then actual revenues collected and the actual money spent.

If revenues are off target and money is being returned to the Treasury, how will government spending boost business?

Let’s begin by looking at customs.

The following can be regarded as friendly customs havens. Going green as an importer makes good business sense.

Import duty has been removed on machinery, spares and inputs for direct and exclusive use in the development and generation of solar and wind energy.

Agribusiness also got a boost as inputs used in processing and preservation of seeds for planting will be exempt from import duty.

Then we had new hostile custom havens.

Big manufacturers in Mariakani and elsewhere will not like the increase in import duty on iron and steel products from 0 per cent and 10 per cent to 25 per cent. This will impact the construction industry, with the cost likely to be passed on to the consumer.

Now you have motivation to file Paye or motivate staff as the government has allowed the deduction of expenditure incurred by employers who meet the cost of their employees‘ vacation within Kenya.

This deduction is only available for 12 months. The benefit will also not be subject to Paye.

There was, however, a challenging compliance requirement where the period for remittance of NSSF contributions reduced from 30 to 10 days.

Considering that NSSF rates are going up starting this month, many people may not like this.

Consider scouting for business at these dockets: Security, with Sh6.7 billion for leasing of 2,700 motor vehicles and aircraft for surveillance and response. Those in the hiring business should look in this direction.

Security equipment upgrade

There is also Sh2.9 billion for recruitment and training of an additional 10,000 police officers.

Consumables will create opportunities here. Then there is the Sh71.3 billion allocated to the Kenya Defence Forces.

I see opportunities in the Sh3.5 billion for security equipment upgrade and modernisation.

The total budgeted expenditure for Energy, Infrastructure and ICT is about Sh400 billion (both recurrent and development).

Sh116.7 billion has been allocated to both ongoing and new development of roads.

Several SMEs are in this space in different capacities from equipment leasing, car hires and supplies.

The energy sector got Sh23 billion for electricity transmission infrastructure and Sh10.6 billion for rural electrification.

These works are largely outsourced.

Education sector was allocated Sh294.55 billion, an increase of 7.6 per cent.

The allocation is expected to enhance access to education and transform the education system, including free primary and secondary education and teachers’ salaries.

The health sector has been allocated Sh28.7 billion.

There will also be budgets for health care functions at county governments — who are handling county health centres and pharmacies, ambulance services, promotion of primary health care, licensing and control of undertakings that sell food to the public, refuse removal, refuse dumps and solid waste disposal.

Agriculture got a boost through the Agribusiness fund, which will be accessible to the private sector.

Financial institutions have indicated willingness to leverage government’s seed capital by a scale of one to 10.

Consultants should also look out for funds allocated for “Enhancing Employment for Women and Youth”.

Some Sh24.495 billion has been set aside for enhancing women and youth empowerment.

The amount will be used to improve access to affordable credit. This will promote entrepreneurship and improve skill sets needed.

There is also Sh8.1 billion for recruitment and training of 21,870 youth to the National Youth Service who will work on community development projects.

Counties and Devolution got Sh226.7 billion So, don’t just concentrate on the big towns. Find out what these 47 counties are doing.