Experts expect Budget to address security, inflation

Thursday June 12 2014

PHOTO | SALATON NJAU | FILE National Treasury Cabinet Secretary Henry Rotich during a past function

PHOTO | SALATON NJAU | FILE National Treasury Cabinet Secretary Henry Rotich during a past function NATION MEDIA GROUP

By MWANIKI WAHOME
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Treasury Cabinet Secretary Henry Rotich steps in Parliament Thursday to read the Budget with the burden of rolling out the Jubilee Government’s agenda for a better Kenya.

The minister, whose search for funds to finance the Sh1.8 trillion Budget means he will have spent less than 18 hours in the country, will have to address ways of reviving the economy, reducing the cost of living and creating jobs, while arresting runaway insecurity.

“We expect the Budget to address the parameters that determine the cost of food,” agricultural expert John Mbuni said.

REDUCE COST OF FOOD

“Such items like fertilisers, pesticides and farm inputs should be made more affordable to farmers to enable them increase production and eventually reduce the cost of food.”

The investing public will be waiting to hear how the government plans to deal with the high cost of energy that has made them pay almost three times what their counterparts pay in neighbouring Ethiopia.

How the Treasury intends to ensure adequate food supply in the face of the expected drought is also of interest.

Mr Rotich is on road shows in Europe to market Kenya’s search for Sh135 billion through a Eurobond to finance the Budget deficit.

Experts say the government will have to focus on security to improve investors’ confidence and reverse the decline in tourism. The government has indicated that it will increase allocation for that.

“Two issues are important for growth of the economy: absorption of funds and dealing with insecurity. If these are handled prudently, it’s possible to achieve higher economic growth in the coming year,” said Institute of Economic Affairs programme officer John Mutua.

In addition, police will have Sh1.6 billion insurance, for the first time, while Mr Rotich is expected to announce an up scaling of leasing of police equipment, motor vehicles and helicopters.

Tourism has received a blow in recent weeks after tourists flew back to Europe last month following travel advisories from America, Britain and Australia.

“We appreciate the measures spelt out by President Kenyatta, but we expect more focus to be put in marketing through Budget allocation.

MARKETING FUNDS

“The industry is also hopeful that the Tourism Bill will be taken through Parliament to become law as it will unlock marketing funds,” Kenya Tourism Federation Vice-Chairman Adam Jillo said.

An anti-poaching unit should be set up to beef up security in national parks, he said.

The rising cost of living indicated by the rising inflation trend from 6.27 per cent in March to 6.41 per cent in April and further 7.3 per cent in May is among the issues that the Budget has to tackle.

Although the government is expected to increase allocation for irrigation, including to Galalu irrigation scheme, the public will be eager to hear the measures that it will propose in the interim to ensure food is affordable.