International Center for Policy and Conflict (ICPC) on Tuesday, August 4, called for the FY2020/2021 budget to be overhauled stating that documents prepared by the National Treasury did not adequately capture effects of the Covid-19 pandemic.
In a statement to newsrooms, the organisation's Executive Director Ndung'u Wainaina opined that the country should have adopted a county situational analysis strategy with a timed review mechanism rather than one size fits all in line with the re-opening of the economy.
He conveyed that the economic crisis brought on by the coronavirus pandemic required fast, large, effective and a well-targeted fiscal stimulus.
"The country is already seeing a wave of increasing infections. This makes it absolutely necessary to overhaul the FY2020/2021 budget to reflect and align with the reality of Covid-19 and enormous challenges as the country faces the worst social and economic crisis. This is no moment for huge capital expenditure on megaprojects," Wainaina noted.
He further stated that the government’s immediate priority should have been to put measures to lower unemployment rates in deciding on the stimulus programs to undetake.
"The size of the budget fiscal stimulus response needs to be proportionate to the damage that would otherwise be done and putting purchasing power with spending needs.
"Treasury and State House did not plan, budget and ensure the maximum use of available resources to protect the socio-economic rights of the Kenyan population being brutalized by the effects of the Covid-19 pandemic," the organisation noted.
Wainaina added that the government should use the budget to change the distribution of incomes arising out of economic activity by increasing expenditure targeted at low-income groups.
ICPC advised that the budget should address a number of issues including county-based healthcare which needs accelerated funding to increase testing and screening capacity in high-density areas.
The state should also increase expenditure to expand laboratory capacity and reduce turnaround times for results, increase bed capacity, provide proper PPE and improve tracing and isolation facilities.
Additionally, revenue sharing should be revised to ensure adequate funding of County governments’ infrastructure to provide safe and consistent access to water and sanitization of public transport, protection of the hungry and support to those without rent and the provisions of masks.
The organisation proposed a raft of measures for businesses and the economy including accelerated depreciation measures and providing cash flow assistance; Temporary Employer/Employee Relief Scheme (TERS); low interests government-guaranteed business rescue fund; increasing social grants and targeting activities with high direct employment intensities.
On June 11, Treasury Cabinet Secretary Ukur Yatani presented the 2020/2021 budget which was projected at KSh 2.79 trillion where he announced the roll out an economic stimulus programme aimed at catalysing economic activity, providing livelihood to Kenyans and enabling businesses to recover from the adverse effects of the COVID-19 pandemic.
Yattani focused on the Big 4 Agenda and President Uhuru Kenyatta's 8 Points Economic Stimulus Program. He also proposed a number of taxation including digital service tax to generate income for the country.
Education and Interior Ministries were the highest beneficiaries with Ksh 497.7 billion and Ksh 167.9 billion allocated respectively to the two ministries under CS George Magoha and Fred Matiang'i. Despite the country facing the Coronavirus (Covid-19) pandemic, with a crippled health system, the Health Ministry was awarded a paltry Ksh 111.7 billion.
