Coming against the background of economic shocks caused by the Covid-19 pandemic, Treasury Secretary Ukur Yatani’s Budget proposals are unique in many ways considering that the economy is hurting and no one is sure when the country will emerge from the woods.
Be that as it may, the public expects that the promises made, especially on how to improve public welfare, support social services and increase gross national wellbeing will be implemented as outlined.
This is the whole basis of the tax and spend principle.
The public expects that the money raised from taxes, which in Kenya are many, will be used to fund public goods, improve the ease of doing business, create jobs and make Kenya’s economy competitive.
Although a large proportion of the Budget will be supported by debt and donor funding unlike in previous administrations, the public expects that those charged with the responsibility of borrowing and spending will do so conscientiously, so as to ensure that the public gets value for money and the country is not saddled with unsustainable debt.
Already, the debt burden has emerged as an important question in public discourse and the fact that the country intends to borrow more in the coming year is enough to cause jitters considering that the amount of money the Treasury will spend on debt repayment in 2020-21 will be more than it actually intends to borrow over the same period.
Indeed, it is disturbing that whereas the government expects to collect Sh1.6 trillion from tax revenues, it intends to spend Sh904 billion servicing debt in that period.
Again, the proportion of the Budget that has been earmarked for recurrent expenditure is high compared to the amount set aside for development spending.
In the medium and long term, the Treasury ought to find ways to narrow this difference.
Ultimately, the success or failure of the government’s Budget plans will be determined by the Treasury’s fidelity to its own estimates and estimations.
As such, it is important to respect the plan, live within it as much as possible and avoid the spectre of constant revisions of the Budget over the next 12 months.
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