President Uhuru Kenyatta’s Sh2.6 trillion budget pain

Seuri Miciek sells belts and wallets in Nairobi's Pipeline. He says the cost of living has gone up to unbearable levels, pushing traders out of business. Miciek called on the Government to put up measures to ensure basic necessities like flour are affordable. [David Njaaga, Standard]

NAIROBI: President Uhuru Kenyatta will need Thursday’s Budget to reassure Kenyans ahead of his second stab at the Presidency.

With food prices a record high, the country’s economy reeling under a Sh3.8 trillion debt, and a number of pre-election promises yet to be fully fulfilled, Kenyans will be keenly listening as Treasury Cabinet Secretary Henry Rotich outlines how the Government intends to spend their taxes in the run-up to the August 8 polls. 

The Budget offers Uhuru a platform to convince Kenyans to re-elect him and a last ditch attempt to deliver on the promises he made five years ago.

It also offers him a chance to put Kenya’s economic ship back on course.

Striking balance

Striking a balance between better pay for public servants and ensuring that they properly utilise money allocated in their dockets to serve the public will form a key part of Rotich’s 2017-18 Budget Statement.

With many Kenyans struggling to make ends meet, find jobs and support their families, the government will be under pressure to meet growing expectations from the Budget.

Many will be eager to know how the Government plans to address their needs given that they will be required to raise taxes worth Sh1.77 trillion, more than double what they gave in 2013 (Sh847 billion).

This, despite the fact that almost half of these taxes will be used to pay 700,000 Kenyans who form less than two per cent of the country’s population.

Although Uhuru promised to tame the ballooning wage bill, realities of an election year have forced the Government to allocate Sh100 billion to cater for civil service salary increase.

The proposed salary increase will swell the wage bill, which currently stands at Sh627 billion annually.

“In simple terms, 50 per cent of all the money collected as revenues in Kenya goes into the pockets of less than two per cent of the country’s total population,” Uhuru told legislators in his last Parliament address before polls.

Uhuru will also be forced to bend to legislators' pressure and give Sh40.2 billion sendoff package to the 416 lawmakers despite strongly recommending that MPs salaries must fall during his recent State of the Nation address.

It is an election year and he will need their goodwill and support. If he does not, they will stall the budget process.

This will be against the National Treasury’s proposal to give legislators Sh36 billion. According to Treasury Principal Secretary Kamau Thugge, MPs can still have their demands met as long as they find sectors to cut the money from.

There is also a scare that Members of County Assembly (MCAs) may also push for a send-off package.

The ever increasing salaries and allowances of politicians have been partly blamed for unsustainable pay demands by other cadres within the public sector.

Doctors, nurses, lecturers and teachers have in the current financial year engaged in strikes and go-slows as they called for higher salaries.

On the receiving end has been the ordinary Kenyan who has gone without service from the very group that pockets away half of his taxes.

Banks will also be watching to see what the budget will do to address loan rates.

They have already sent subtle warning that Uhuru’s promise to deliver a double digit growth will never come to pass by refusing to loan small businesses who drive the economy.

The President is aware that even the six per cent growth annually is being driven by big infrastructure and that the real economy is suffering even as banks threaten to stifle it.

Another headache for the Government will be on how to ensure that public servants in various ministries actually use the money allocated to serve the public.

Treasury has already protested that ministries failed to use up billions set aside for development.

Rotich accuses ministries of making huge demands without a plan on how to spend it.