Unpacking Kenya’s ambitious budget - CNBC Africa

Unpacking Kenya’s ambitious budget

East Africa

by Elayne Wangalwa 0

Kenya has today unveiled its largest national budget for the financial year 2015/2016. PHOTO: CBK

Kenya has today unveiled its largest national budget for the financial year 2015/2016.

The country’s 2.2 trillion Kenyan shilling budget is the most ambitious yet with infrastructure, education and energy sectors receiving the largest share.

During the country’s budgetary address presented by the National Treasury Cabinet Secretary Henry Rotich noted that the government anticipates the economy to grow by 7 per cent this year bolstered by low global oil prices and it infrastructure projects.

"Our economy continues to be the fastest growing in the region…We have significantly improved the business environment, rolled out the biggest infrastructure in Kenya's history - the standard gauge rail, completed key programs in the roads and energy sector and brought down the cost of living," Rotich said.

The country’s 2015/2016 budget which has been prepared during a slow global recovery will focus on economic growth and sustainable development.

This time round the government has allocated resources to key projects so as to drive inclusive growth.

With a keen focus on security following incidences of terror attacks and threats from Somali insurgent group Al-Shabaab, the government has allocated 215 billion Kenyan shillings for the security docket.

"Tackling insecurity decisively is the top priority of the government strategy to sustain growth momentum of the economy while creating jobs and reducing poverty on a sustainable basis," Rotich noted.

"Without achieving security for our citizens, achieving our growth and development objectives will remain a mirage."

This sentiment is equally shared by many Kenyans who feel that the security docket deserves a larger portion.

“It is a good idea that the government is focusing on security this time round. Without security the nation cannot move forward,” Mary Atieno said.

“Security is critical and the government should priorotise on that sector,” said Joshua Karanja.

Nonetheless Johnson Nderi Manager Corporate Finance at ABC capital says, “The money set aside by the government for the security docket is wastage. The sector does not need additional funds. I think the whole security system just needs to change.”

Already, 112.5 billion Kenyan shillings has been put aside for military security and another 102.4 billion Kenyan shillings for the internal security.

The government has set aside 20.5 billion Kenya shilling for general economic and commercial affairs in which 6 billion Kenyan shillings has been set aside for reviving the country’s tourism sector which has been perturbed by insecurity.

For agriculture, a backbone to the Kenyan economy, the government is said to set aside 79.2 billion Kenyan shillings in order to increase food security. Education on the other hand has been allocated 335.7 billion Kenyan shillings and the health sector will get 59.2 billion Kenyan shillings.

With a 700 billion Kenyan shilling deficit the government anticipates to fill this gap with aid from internal and external debt. Moreover, Rotich says that they expect to collect tax revenues of about 1.36 trillion Kenyan shilling as well.