, NAIROBI, Kenya, Jun 11 – The Sh866 billion in the new budget has been met with apprehension.
Business analyst Peter Kegode told Capital News it was a record budget that realised an increase of about Sh100 billion.
But after breakdown, he said it was a mere colouring likely to create bigger financial problems than the country was already facing.
“The entire budget is a record and is very significant, but shocking is the disconnect between the development budget and the recurrent expenditure,” he said.
The recurrent expenditure takes 75 per cent of the entire budget.
Mr Kegode said it was sad that the government will spend most of the tax payers’ money on expenditures that have no impact on development.
Also of concern from Finance Minister Uhuru Kenyatta’s huge budget is where he will get the money in view of the harsh economic times.
Mr Kegode said it was surprising because the 2009/2010 budget comes at a time when the country’s economy is trailing due to the global recession worsened by famine and food shortage.
“Where he will get the money from is another story because people have been losing jobs; there has been a lot contraction in the economy so the tax base has not been healthy,” he said.
He said there was a likelihood of creating a huge deficit as the Minister will have to borrow a lot from the domestic market to finance recurrent and development expenditure.
He said it will result to competition with the private sector for the same resources which will in turn result in high interest rates making funds expensive.
Mr Kegode observed with such a situation, inflation will also skyrocket.
“It is a concern how he will finance it, even though donors come in they will not cover the huge deficit he is putting himself into,” he said.
The analyst who is also an Agricultural specialist expressed displeasure with the Sh7.7 billion allocated to the Agriculture Ministry.
He said agriculture is the engine of growth in Kenya and termed the allocation as too misplaced to boost agriculture in the country.
Mr Kegode also said the allocation falls short of the Maputo declaration which resolved that African governments would allocate 10 percent their entire budgets to agriculture.
He said agriculture is also an important sector that will reach out to the poor by increasing food production resulting to affordable food prices.
“There is need to ensure the nation is self sufficient as far as food is concerned, if you have people who are hungry there is no way you will govern them, political expediency will not work if you do not solve yourself and feed yourself as a nation,” he said.