The Cabinet Secretary for the National Treasury has submitted to Parliament the Budget estimates for the financial year 2017-2018 which is a near reflection of what the Budget will look like.
A Budget is an allocation of resources to priority areas that are aimed at addressing a country’s needs in accordance with its development plan.
In Kenya, the Budget is guided by Vision 2030, which is broken down into medium term plans for implementation purposes. Accordingly, the 2017-2018 budget will implement the third medium plan of Vision 2030.
A Budget also indicates sources of resources and, in this case, funds to be allocated to identified priority areas, budgetary deficit and proposed measures to bridge the deficit.
In reviewing and analysing the Budget, Kenyans will therefore be keen to assess whether priority allocations meet the country’s needs and are a reflection of actual state of economy.
Of equal interest also, will be the sources of funds and how the government plans to plug any holes in the Budget. These are significant budget issues with far reaching implications to citizens.
The citizens of Kenya will be looking for a citizen-centric Budget. This is a Budget that attempts to address varied, common and collective needs of citizens in accordance with the mandate of the government.
The key issues that affect Kenya that the budget must address at the very minimum include food due to adverse weather patterns among other factors; high unemployment rate especially among the youth; inadequate accessibility and affordability of health facilities and services; high cost of doing business in general; relevance and quality of education; inadequate infrastructure, transport and logistics; and insecurity.
If Kenya were to pick some vital lessons from the current drought and food scarcity in some parts of the country, we would prioritise allocation of resources to agriculture, food production and storage together with water harvesting and storage.
A look at the highlights of 2017-2018 Budget indicates that Sh7.3 billion has been allocated to food and agriculture with the bulk allocation of Sh5 million towards inputs subsidy for fertiliser and seeds.
It’s arguable whether this allocation is adequate or not. In my view, I think it’s time for a comprehensive and holistic review of our food strategy to influence resources allocation.
High unemployment especially among the youth continues. The youth have great potential which can easily and quickly become a huge liability.
The Budget estimate allocates Sh9.8 billion for youth and women enterprise funds. These have been in existence for some time and it’s time they are reviewed for their effectiveness in achieving their objective.
Also, the relevance of skills through education and industrialisation are key measures towards addressing this issue.
Our education from the elementary to the tertiary level is bedevilled by many challenges. Universities, in particular, are churning out graduates without necessarily considering the skills required in the market.
This requires a complete overhaul to take into account the local and global trends both and to reinforce skills in demand. Much focus need to be placed on technical skills for industrialisation. In the Budget Estimate, Sh13.4 billion has been proposed for enhancing access and transforming educational through e-teaching and learning and Sh83 billion for university education and Sh6 billion for technical and training institutes among others. Whereas the huge size of the amounts are arguable, they reflect realisation that digital and technical skills are increasingly becoming relevant in the world.
Quality, accessible and affordable health care services is the primary responsibility of the government. There’s a direct correlation between economic development and quality of health care of a nation.
Health services have had significant challenges ranging from inaccessibility of health facilities, lack of appropriate medical care, inadequate medical equipment to the current prolonged doctors’ strike.
The devolution of this function seemed not to have benefited from collaboration between central and county governments.
A review is required to ensure impediments are removed. The budget estimate has made key allocations to the two main referral hospitals i.e. Kenyatta National Hospital (Sh9.5 billion) and Moi Teaching and referral hospital (Sh6.2 billion). Free maternal health care (Sh4.3 billion) and leasing of medical equipment (Sh4.5 billion) continue to be a focus to the government.
In the recent past, there has been significant investment in infrastructure, transport and logistics covering roads, rail, ports and energy. This continue to receive attention with significant allocations in 2017-2018 Budget estimates. Notable allocations are in various roads projects which are both domestically and foreign financed in the tune of Sh107 billion, subsidy for standard gauge railway Phase I (Mombasa- Nairobi) for Sh15.5 billion and provision for the second phase of the railway (Sh69.6 billion).
There is significant allocation to geothermal energy and last mile connectivity to aim at connecting all households to electricity.
The government projects a Sh2.62 trillion Budget in 2017-2018 financial year representing a 5.7per cent growth over the 2016-2017 Budget which was at Sh2.48 trillion.
This Budget is largely funded by tax revenues projected at Sh1.70 trillion compared to 1.51 trillion in 2016-2017 representing a 12 per cent increase which is higher than projected economic growth of 5.9 per cent.
The Kenya Revenue Authority will have to work extra hard to raise government funds to finance the Budget. The authority has invested in technology to enhance its tax collection through the iTax system.
The authority will also need to carry out intensive risk-based audits across all taxes and enforcing compliance with betting, lotteries, gaming and prize competition tax.
Benson Okundi is partner and government and public services leader for Africa, PricawaterhouseCoopers.