Cofek warns of tough times ahead for Kenyans
What you need to know:
- The consumer body noted that the budget emphasized a lot on budgetary allocations without emphasis on good governance except for the enhancement of the institutional capacity of the anti-corruption and public prosecution offices.
- The government is looking for ways to finance the 2014/2015 budget and the Sh131.6 to Sh175 billion Eurobond is critical, thus the trip by Treasury Cabinet Secretary Henry Rotich to the UK to market the country’s Eurobond.
A consumer lobby group has warned of tough times ahead for Kenyan consumers resulting from the huge deficit and the lack of clarity of how the budget will be funded.
In a statement posted at the Consumer Federation of Kenya (Cofek) website - the group admitted that the budget was not open to key consumer issues.
“Raising in excess of Sh300 billion deficit and how the ambitious budget will be funded can only mean more domestic borrowing, high cost of credit and inflation which issues will combine to dim the ambitious GDP growth,’ it stated.
The group however lauded the government for the decision to review the Competition Act and merge financial institutions under a regulatory and services authority as stated in the 2014/2015 budget.
Cofek added that the focus on free education, maternal care and laptops without addressing the quality of service delivery was uninformed.
“Given the state of the economy with challenges of insecurity, a slump in tourism, proposed hikes in electricity cost, petroleum and heightened political temperatures, just to touch a few, consumers must brace for tough times ahead,” said Cofek.
It added that the wage bill was not tackled and that the remedies earlier announced by the president on wage cuts need to be implemented to avoid the spillover of the huge wage bill to the next financial year.
The consumer body noted that the budget emphasized a lot on budgetary allocations without emphasis on good governance except for the enhancement of the institutional capacity of the anti-corruption and public prosecution offices.
The government is looking for ways to finance the 2014/2015 budget and the Sh131.6 to Sh175 billion Eurobond is critical, thus the trip by Treasury Cabinet Secretary Henry Rotich to the UK to market the country’s Eurobond.
This, cofek says, will keep Kenyans in the dark for a while to know how indeed the budget will be financed.
“The silence on the proceeds of the Eurobond means that Kenyans will have to wait longer to know how the huge budget deficit will be realized,” said the lobby group.
The body stated that it will continue to engage with the National Treasury on taxation, cost of credit, enhancing competition and market regulation.
It urged consumers not to celebrate the plan to lower food prices by launching the Galana scheme due to the administrative challenges that are likely to arise from the taking off of such a project.
