EDITORIAL: Spur economic growth – Business Daily

The Treasury wants to increase the national budget by Sh86 billion with majority of it going to development projects. In these tough economic times, this is good news. The government remains the biggest buyer of goods and services.

Projects such as roads, power plants, affordable housing and healthcare among others have the effect of putting money in private hands through demand for raw materials, which ultimately creates jobs and sales for companies.

Utilised properly, the Sh86bn could be a shot in the arm in an economy that is quickly hurtling towards recession going by the numerous job cuts, profit warnings and firms closures. To ensure the expenditure spurs economic growth, the 40 percent local tenders policy must be strictly followed. The country has the materials needed for its developmentt.

And then there is the crucial matter of bills payment. We hope that once the firms have delivered on their contracts, payment will be prompt.

They shouldn’t have to suffer the cash flow challenge that has been the fate of thousands of others that delivered goods and services to counties only to chase the same for years until they were forced to close shop.