Kenya Second budget Under the shadow of COVID-19, the pandemic is economic recovery The Uhuru Kenyatta Legacy Project.. Clearly, during the President’s last fiscal year, the focus is on completing ongoing investments and creating an enabling environment for economic recovery to protect livelihoods.
The agricultural sector, which received a slightly larger share of the budget, remains an integral part of the country’s economic recovery strategy. The sector contributes 34% of gross domestic product..That also Record relatively solid performance More than any other sector of the economy affected by the pandemic.
However, there are challenges within the sector that require increased investment from the public and private sectors. In 2020, widespread flooding damaged farmland and increased post-harvest losses. In addition, the Desert Locust outbreak in arid and semi-arid areas Destroyed approximately 175,000 hectares Cultures and meadows. It affected the lives of around 164,000 households.
Finally, the COVID-19 pandemic disrupted the food supply chain at the start of the pandemic. Terribly confused Formal and informal supply chains. However, the impact of the pandemic has reduced income opportunities in these sectors, enabling the sector to provide livelihoods to more people who have joined the sector from other sectors such as services and industry. .
The budget addresses these issues, but it can pose challenges in keeping promises. On the one hand, the government is fighting for Sufficient income to support expenses..It’s also difficult Keep your expenses under control Borrowing within the authorized range.
In addition, Kenya needs to address inefficient spending in order to meet the targets set out in the budget. These include: Increase the efficiency of public spending By allocating funds to the most influential programs, making project funding available when needed and reducing unnecessary expenses.
Allocation to agriculture
The budget allocates 2.4% to centrally managed agriculture, up from 2.2% last year. In addition, due to the delegation of the Kenya governance system, further public investments in this sector will be made by the county government.
The budget allocated to the county government is 12% of the total budget. To date, the county government has allocated an average of 6% of its budget to agriculture. Therefore, if the county government maintains the same pattern as before, the total government investment in this sector is expected to be around 3.2% of the total budget.
This means that the total funding for the sector is still far from Kenya’s international. commitment ten%.
On the positive side, this year’s agricultural budget has been distributed more evenly across sub-sectors. Programs will be funded to promote climate change and resilience to change. For example, there are also funds to increase the productivity and incomes of smallholders through the provision of subsidized inputs.
There is also a shift from large-scale irrigation projects to small-scale irrigation projects. Large-scale irrigation projects Corruption And Embezzlement.. New funding for small-scale irrigation and value-added projects aims to address this problem.
Kenya’s livestock sub-sector has been constrained by low productivity, high production costs and limited market access. Farmers also face insufficient access to quality improvement assistance, such as dissemination services, artificial insemination and veterinary services. In addition, the effects of climate change affect pastoralists who constitute the majority of pastoralists. In light of this, the allocations of the national equity insurance program are in line with the risk mitigation and resilience measures.
There are also tax measures. These include in particular import tax exemptions on inputs intended for the textile and clothing industries. This is to support the revival of cotton areas. The other is the introduction of import tariffs on leather products. It aims to improve the lot of the declining leather industry.
In addition, a new fish processing plant near the new coastal port of Lamb has an allocation of Ksh1 billion (about US $ 10 million). The government is also considering completing another processing plant in Mombasa, the country’s main port. New investments in the blue economy 3 times the current membership fee We will contribute to the GDP using undeveloped maritime resources.
Overall, budget spending is a top priority for the president Great for the agenda, Includes food security. Expenses are also government 10-year agricultural growth strategy.. The plan aims to increase the productivity and incomes of smallholders, increase the added value of agricultural production and increase household food security.
But it remains to be seen whether the government will be able to shake off the worst of fiscal year 2020/21. Especially the government Increase enough income Fund the program. It had a timely ripple effect Payment of funds At the center of spending.
The 2020/21 budget was constrained by a lack of cash as the government struggled to increase revenues during the pandemic. After that, the government Significant debts, And the increase in consolidated funds Debt repayment Will be Great drainage.. Rising debt can threaten macroeconomic stability, scare off investors and make it difficult to attract investment, especially if the government is at risk of default.
The government must also maintain Political stability In the push of Constitutional referendum Prior to the general election of August 2022. In the past, elections (and the threat of instability) have been associated with economic downturns.
This will severely hamper the development of the transformation program due to lack of public and private investment in the sector.
Author: Timothy Njagi Njeru-Egerton University Tegemeo Institute Research Fellow