Key budget highlights: What stood out

Treasury Cabinet Secretary (CS) Njuguna Ndung'u.

Treasury Cabinet Secretary (CS) Njuguna Ndung'u says the depreciation of the Kenyan Shilling has increased the size of the public debt stock.

This, he says, is because the majority of the country's public debt is denominated in foreign currency.

The CS made the remarks while presenting the FY2023/24 budget statement (3.6 trillion) before Parliament on June 15, 2023.

According to CS Ndungu, Kenya's public debt, which is at Sh9.4 trillion, remains feasible despite global shocks which are disrupting the economy.

Additionally, the CS proposed fund allocation for ministries of Education, Transport and Agriculture ministries in the 2023/2024 budget.

For the Education Sector, Treasury proposes a sh628.6b allocation. Out of this, Sh12.5b will cater for free primary education, Sh65.4b for free day Secondary education including insurance under NHIF for school students and Sh25.5b for Junior Secondary capitation.

For examination fees waiver, the ministry has proposed Sh.5b, 4.8 b for the recruitment of 20,000 intern teachers and 1.1b for the promotion of teachers.

He also allocated Sh4.9b for the school feeding programme and 940 million for the provision of sanitary towels.

In addition, Sh1.3b is for the training of teachers on competency-based curriculum and Sh400m for digital literacy programme and ICT integration in secondary schools.

Allocation for school Sh6b for primary and secondary schools including classrooms for Junior Secondary Schools and 1.9b for construction and equipment of technical training and vocational training centres.

He further added Sh 1.8b to increase access and improve the quality of educational training programmes under East Africa skills transformation and region integration projects.

Additionally, Sh2.7b for Kenya's secondary education quality improvement project and S 5.2b capitation for TVET students, Sh980 million proposed for technical vocational education training and entrepreneurship, Sh1.5b for the promotion of youth employment and vocational training and Sh749m for research science technology and innovation.

The Treasury proposed a review of the VAT rate on petroleum products by amending the VAT Act to remove the preferential rate on petroleum products so that the products will be subject to the standard VAT at 16 per cent.

The government will lower the cost of Liquefied Petroleum Gas by removing VAT on LPG, and propose for removal of the import declaration fee and railway development levy on LPG.

The Kenya defence forces and national police service are exempted from import declaration fees and railway development levy with respect to equipment machinery and motor vehicles for their official use.

Treasury CS Njuguna Ndung'u proposed an allocation of Sh49.9 billion to Agriculture.

Kenya imports rice at the rate of 35 per cent instead of 75 per cent under the EAC common external tariff to meet food demands, and import wheat at under 10 per cent instead of 35 per cent.

In order to promote local manufacturing to make animal feed affordable to farmers, Kenyans import inputs for the manufacture of animal feed duty-free.