This archive report was first published on 11 June 2020.
On June 11, 2020, the Kenyan government presented its annual budget, with Mr. Ukur Yatani at the helm. The theme of the budget was 'stimulating the economy to safeguard livelihoods, jobs, businesses, and industrial recovery.' However, as economist Tony Watima points out, the budget's focus on economic recovery is premature, given the ongoing Covid-19 pandemic.
Watima notes that the budget assumes the economy has navigated itself out of the pandemic, but in reality, the world is still under social-distancing rules, and supply chains have not fully opened up. This makes a pro-growth economic recovery unlikely, and instead, the government should prioritize the stabilization of the economy.
Watima argues that the budget's focus on the Big Four agenda, which includes investing in and attracting investment in key sectors, is a compromise between political and economic realities. However, he believes that this approach is flawed, as it does not address the income shocks caused by the pandemic, which have affected businesses and individuals.
Watima suggests that a redistributive budget, which prioritizes the allocation of resources to address the pandemic's impact, would be more effective. He proposes that the government should allocate more funds to health, water, and sanitation, as well as implement a robust cash transfer program to support those affected by the pandemic.
Watima also raises concerns about transparency issues in the budget, including the lack of disclosure of funds raised through the Emergency Response Fund and the e-citizen platform. He believes that these issues should have been highlighted in the budget statement.
As an economist and writer for the Business Daily, Watima's critique of the budget highlights the need for a more nuanced approach to addressing the economic impact of the Covid-19 pandemic.
