Budget: Covid-19 vaccines underfunded, masks to be taxed

The National Treasury has allocated the Ministry of Health Sh121.1 billion under the 2021/22 budget, a slight increase from Sh112 billion, in the last financial year.

Of the Sh121.1 billion, Sh56 billion is for development spending while Sh65 billion will be spent on recurrent expenditure.

The country’s biggest economic and health challenge, the Covid-19 pandemic has been allocated Sh15.4 billion of which Sh3.9 billion will be for procuring vaccines and Sh9.5 billion for engagement of specialists, tests and supplying hospitals with equipment.

However, the Parliamentary Budget Office (PBO) has criticized Covid-19 allocation as “hardly adequate given the estimation that the cost of vaccinating 30 percent of the population is Sh34 billion” meaning there will be overreliance on donors.

PBO has also raised issues with underfunding mental health management with a paltry Sh200 million allocated to the Mathari Teaching and Referral Hospital to modernise wards and staff houses.   

Winners in the budget include proposed removal of Value Added Tax (VAT) on a number of medical equipment, medicine and supplements which attracted 16 percent VAT including malaria diagnostic test kits, orthopedic or fracture appliances, food supplements and other artificial parts of the body namely pacemakers, but excluding parts and accessories.

Also proposed for exemptions are medical ventilators, breathing appliances and gas masks, excluding protective masks having neither mechanical parts nor replaceable filters but upon approval by the Health CS. Also not excluded are treatment and diagnostic or laboratory reagents, needle, urine bags and infant milk, according to the analysis by KPMG on the Finance Bill 2021.

Treasury CS Ukur Yatani has proposed to allocate Sh47.8 billion to National referral and specialized services, an increase from Sh43.8 billion in the 2020-2021 financial year.

Sh10.2 billion will be allocated to health research.

A further breakdown shows the ministry of health has been allocated Sh22.5 Billion for development projects for preventive, promotive and reproductive health.

Other development spending include, National Referral facilities have been allocated Sh11.7 billion, while Sh20 billion will be for health policy, standard regulation and Sh587 million for health research and development.

The much famed Universal Health Coverage under Big Four has Sh45.6 billion to fund a countrywide rollout in all 47 counties after a 12-month pilot program in Nyeri, Isiolo, Kisumu and Machakos.

Maternal and infant mortality was allocated Sh1.6 billion, an increase from Sh422 million with Managed Equipment Service (MES for 119 Hospitals) receiving Sh7.2 billion, an increase from Sh6.2 billion.

At least Sh600 million is equipment at the National Blood Transfusion Services (NBTS) on the face of the country’s blood crisis.

The Moi Teaching and Referral Hospital (MTRH) in Eldoret will get Sh120 million for construction and equipment of a children’s hospital with Sh15.6 million going to equipping its Intensive Care Unit (ICU).

Interventions for malaria, TB and HIV which “are all largely dependent on donor funding and there have been challenges such as the recent shortage of ARVs due to a dispute between the US aid agency and the Kenyan government,” added the PBO report noting that under the budget allocated Sh17.31 billion from Global Fund.