Devil is in the detail, watch this space

Kenya: Cabinet Secretary Henry Rotich delivered his and indeed the Jubilee Government’s second Budget speech.

It was interesting to see how statistics were thrown to Kenyans in terms of expenditure allocations.

In fact, my initial thought while I heard him deliver the speech was – if we can achieve all this, forget 5.8 per cent GDP growth, double digit growth is clearly in our sights.

My secondary thought and perhaps the more important one – how on earth are we going to pay for all of this?

What I didn’t hear, other than in passing, was how we intend to control our recurrent expenditure which, as I have had occasion to say before continues to spiral out of control. 

Admittedly, there was reference to controlling wastage in expenditure including proposed new procurement law, e-payments among others. I just hope it is all going to fall into place because without that, I don’t see how we are going to spend on development.

Security is of course the big fly in the ointment in today’s Kenya and it was good to hear that it is a priority for the Government. This is perhaps one of the main reasons our economy has not performed as well as it might.  The safety of our citizens and visitors is of paramount importance and has to be a priority. One can but hope that all that was announced will achieve its aim.

Free secondary and primary education and improved health care was also welcome. After all an educated and healthy population is another major component of a thriving economy. It would appear that the Jubilee government continues to believe that technology will drive education into the future. Computer laboratories for Standards Four to Eight are welcome and a great idea. I also liked the idea of e-learning. But all these need a change in teaching curriculum and indeed retraining of our teachers – not much was said on this.

On the tax front, the big disappointment was that once again nothing was done to widen tax bands.  With VAT on most products and increased National Social Security Fund contribution, the already beleaguered taxpayer could have done with a reduction in personal tax.  Of course there is a plan to rewrite the Income Tax Act starting next month so perhaps we can still hope.

Tax reform featured significantly in the speech but much of this we have heard before and one can just hope that some action will follow this time.  Perhaps the most interesting announcement was the proposal of a Uniform Procedures Bill for income tax, VAT and excise duty.  We wait to see what this will actually contain. It is interesting that once again we are not getting a Finance Bill today – as has happened over the last two years. Unfortunately, the devil is in the detail so it is very likely that there will be provisions in the Bill which were not in the speech.  Watch this space!