Sunday, June 14, 2009

Kenya's recovery budget

By JUSTUS ONDARI Posted Thursday, June 11 2009 -- Daily Nation

Finance minister Uhuru Kenyatta on Thursday transferred Kenya’s development programme to the constituencies as he sought to jump-start the sluggish economy and create more jobs. In what in essence is the country’s fiscal stimulus package, Mr Kenyatta injected funds into key sectors of the economy but channelled much of the money through the 210 constituencies.

Members of Parliament could not have asked for a better Budget as he boosted the Constituency Development Fund. Mr Kenyatta, also, the Deputy Prime Minister, proposed to have the Roads Maintenance Levy and the Kenya Roads Board Acts amended to allow 22 per cent, or Sh4.7 billion, of the roads maintenance fund to be channelled through the CDF for the maintenance of rural roads.

This will increase the amount of money devolved through CDF for roads from Sh10 billion in 2008/09 to about Sh18 billion or an average of Sh86 million per constituency. This represents an 80 per cent increase compared to the year ending in June 2009. “I am confident that CDF mechanism will ensure timely and efficient utilisation of these funds for the intended purposes,” he said.

But he hit hard at Cabinet ministers, permanent secretaries, provincial commissioners and other senior public officials who will now be allowed to use only one vehicle whose engine has a capacity of 1,800cc or more. Reading this year’s Budget against a backdrop of numerous socio-economic challenges facing the country, Mr Kenyatta was, however, confident that the economic foundation laid between 2003 and 2007 was still intact.

“We should not allow our ‘economic car’ to be run on a reverse gear again as happened early last year,” the minister said as he projected a three per cent economic growth in 2009. Mr Kenyatta allocated an additional Sh22 billion — or Sh105 million per constituency — as conditional Economic Stimulus or Resilience Package.

The money will be used to finance infrastructure development, boost education and healthcare and revive other development projects at the grassroots. The funding, to be provided under the respective ministry’s votes, will be released through the CDF framework. To ensure equitable regional development, he allocated a total of Sh1.8 billion for the construction of fresh-produce and wholesale markets countrywide.

The move was aimed at providing markets for farmers, and facilitating commerce, trade and rural enterprise development. The allocation means that every constituency will get Sh10 million to built the markets. Another Sh1.1 billion — or Sh8 million per constituency — will be used to build 200 fish-farming ponds covering 140 constituencies. This will in turn improve nutrition and create over 120,000 jobs and income-earning opportunities in all regions.

The constituencies will also receive Sh525 million, or Sh2.5 million each, for the construction of Jua Kali (informal sector)sheds and another Sh210 million — or Sh1 million per constituency — to equip the sheds with appropriate tools and equipment.

Besides the direct funding to the ministries of Medical Services and Public Health, Mr Kenyatta allocated Sh4 billion under the Public Health Ministry for the construction and equipping of a health centres in every constituency, each of which will get Sh20 million.

To promote preventive health-care, an additional 4,200 nurses, or 20 nurses per constituency, will be employed on contract terms countrywide at a cost of Sh655 million, which translates to Sh3.1 million per constituency. In promoting education, he allocated Sh1.5 billion for the upgrading of two primary schools in every constituency.

Each of the schools will also be equipped with water harvesting and underground water storage facilities. Under this arrangement, every constituency will get Sh7 million. The Budget also allocated Sh6 billion for the construction of a secondary school as a centre of excellence in each constituency, translating to Sh30 million per constituency.

Another Sh1.3 billion will be used to hire an additional 10,500 primary school teachers on contract, or 50 primary school teachers per constituency, to improve the quality of educational service. Each constituency will also receive Sh2 million from the allocated Sh353 million to recruit an additional 2,100 secondary school teachers on contract terms, or 10 teachers per constituency.

Noting that dependence on rain-fed agriculture has continued to expose the country to famine, the Budget initiates a programme intended to reduce farmers’ reliance on rain-fed agriculture to enhance the country’s food production. To boost agriculture, which accounts for a quarter of the country’s wealth, Mr Kenyatta increased the allocation of line ministries — encompassing ministries of Agriculture, Livestock, Fisheries and Forestry — by 63 per cent to Sh35 billion, up from Sh21 billion last year.