This archive report was first published on 11 June 2020.
On June 11, 2020, the Kenyan government presented its annual budget, a seven-year first for the nation. Ukur Yatani, the new face behind the budget, emphasized the theme of 'stimulating the economy to safeguard livelihoods, jobs, businesses, and industrial recovery.'
However, a closer examination of the budget reveals a disconnect between its promises and the harsh realities of the Covid-19 pandemic. The world is still grappling with the pandemic's impact, and social distancing measures are expected to remain in place for the next six months, limiting economic activity.
Given these circumstances, the budget's focus on pro-growth economic recovery seems premature. Supply chains will not have fully reopened, and the stimulating effects of the budget will be minimal. Instead, the government should prioritize economic stabilization.
Ukur Yatani's budget appears to be a compromise between the President's Big Four agenda and the economic response needed to address the pandemic's effects. The government plans to invest in the Big Four agenda as the driver of economic recovery, but this approach may not be effective in addressing the pandemic's income shocks to businesses and individuals.
A redistributive budget, focused on safeguarding livelihoods, jobs, and businesses, would have been more suitable. This would have involved significant allocations to health, water, and sanitation to contain the pandemic and lay the groundwork for a sustainable recovery plan.
With millions of Kenyans expected to face food insecurity, a robust cash transfer program should have been a priority. This would have addressed the income problem underlying food insufficiency, rather than investing in irrigation schemes that may not yield immediate results.
Finally, transparency issues have been raised in the Budget and Appropriations Committee report, which the CS failed to address. The lack of disclosure regarding the Emergency Response Fund and the oversight of e-citizen funds are serious concerns that should have been highlighted in the budget statement.
Mr. Watima, an economist and writer for the Business Daily, critiques the budget's shortcomings and emphasizes the need for a more effective economic response to the pandemic.
