Kenyans welcome the acting National Treasury Cabinet Secretary Ukur Yatani’s admission that the ministry has learnt to cut its coat according to its cloth.
The CS told a Parliamentary Budget and Appropriations Committee that Treasury had since learnt from years of revenue shortfalls that they have been setting targets too high.
The result of Treasury honchos’ refusal to acknowledge the unmet collection targets led to increased borrowings to plug the budget deficit.
CS Yatani said Treasury had, for some time, been making budget estimates based on false assumptions.
He, however, assured the committee members that they would be making realistic budget estimates.
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It is hoped that this change of tact at the Treasury would bring sanity to the financial sector.Banks and other lenders would be encouraged to lend more money to the private sector, particularly the Small and Medium-sized Enterprises (SMEs) which had been starved of credit.
There is hope, too, that a cut in the 2019/20 financial year budget will allow more banks to increase their lending to industrial start-ups. They will also fund expansions to grow the economy in a more sustainable manner.
Perhaps, it may be too optimistic to hope the agricultural sector would attract higher banks’ funding. This will be a welcome departure from the lop-sided growth that has be has benefited only a tiny section of the economy.
Indeed, the growth derived from much of the infrastructure development the State’s has pursued over the past two decades has benefited importers of heavy machinery and other capital goods at the expense of ordinary Kenyans and owners of SMEs.
The Kenyan’s economic plight has been compounded by the State’s growing appetite for increased taxes to pay for the loans borrowed to fund the infrastructure developments.
The real or perceived failure to enforce contractual agreements with foreign contractors has impoverished Kenyans, some of whom were expected to benefit from the job opportunities.
More job opportunities were also expected from industries that were to supply industrial materials to the contractors of these mega-projects.
But contractors brought in their nationals to do the jobs that could have been done by Kenyans and imported cement and fish, which they later off-loaded on to the local market.