As I ponder the budget that the Finance Minister will be reading later on Thursday, I remember with nostalgia his maiden speech a year ago and how uplifting it was to the mood of the country.
Commendably, the monies allocated for the Economic Stimulus Programme have gone a long way in-improving the economy, specifically our infrastructure and the agricultural sector. Obviously, some challenges have emerged in the course of implementation, but as a country we are miles ahead of where we were last year and must give credit where it’s due.
This year, I would want us to focus on improving the livelihood of the majority of Kenyans, aka Wanjiku. Statistics show that the majority of our labour-force is situated at the bottom end of the earnings ladder. These are our factory workers, small business owners, civil servants, farmers etc.
On a daily basis, these Kenyans struggle immensely to cater to their food, transport, housing and health requirements. Coupled with a rise in the cost of living, their lives are almost unbearable and there is no doubt that more needs to be done for their welfare.
Apart from the proposed widening of the base tax bracket, I would recommend that the Kibera housing project be expanded to cater for many more slum dwellers. This is a sure way of alleviating accommodation and sanitation requirements amongst the poorest whilst improving their productivity.
Secondly, I would request our government to monitor closely the cost of fuel and power. It is the one factor that indiscriminately affects every sector of the economy and sadly, the price hikes are almost always passed on to the end consumer.
For example, on a daily basis, Wanjiku uses paraffin not only for cooking but also for lighting purposes. Today, one litre of paraffin costs Sh62 up from about Sh20 eight years ago. This increment is more than 200 percent yet I doubt whether wages have benefitted from relatively similar increments. Yet our power generating companies continue to record huge gains in profit. In the long run, it is the consumer who is left with a lower disposable income while catering to greater responsibilities year in year out.
The gravity of this matter calls for drastic measures that may require Government to institute fuel price controls or at the very least, continue subsidising the production of energy ensuring that the savings are passed on to the consumer.
Aside from that, I can confidently tell you that as a manufacturer, our sector is the major driver of the Kenyan economy. We are the main contributors to the country’s gross domestic product and the downfall of our industries will mean that Vision 2030 remains a hollow dream. Rising costs of power and labour have meant that it has become very difficult for companies to operate in Kenya.
It is no wonder that some of the foreign companies have chosen to relocate their bases to other more conducive environments. Perhaps, what this sector requires is to be propped up in line with that great vision of Kenya.
Sectors such as agro-processing require a re-think in the strategies and incentives employed by the government in order to improve the value chain locally and retain majority of revenue in Kenya. I would propose that the Kenya Revenue Authority dialogues with manufactures to hear from them their proposals on the tax breaks and incentives that would add the most value, obviously working within the context of a budget.
Apart from those brief areas that I have mentioned, it is imperative that the government puts in place systems and procedures that enhance utilization of allocated funds.
It is very sad when a government representative tells us that monies are still lying in Treasury unutilised when we know that great need still exists in all sectors. The budget should progress from being a policy-driven document to a more-operational one.
Let us create capacity for government departments to absorb and spend revenue generated, perhaps by easing the strenuous procurement procedures. This is not to say that we require less accountability on how the money is spent. Rather, it is a call to government to improve their absorptive capacity of fiscal resources.
All in all, I want to say that I am very hopeful with the progress made so far. We have been bombarded throughout the year with disapproving tales of graft and impunity, rightfully so.
Unfortunately, we hear it so much such that we never expect anything great of our government. Let me take a lead in commending them for the notable efforts they have put into reducing our public debt to less than 40percent of our GDP, while our European counterparts increase theirs.
Congratulations! Over to you now Mr Kenyatta.