This archive report was first published on 12 June 2020.
On June 12, 2020, the Treasury's Budget proposals were met with anticipation and scrutiny as the country grappled with economic shocks caused by the Covid-19 pandemic.
The proposals, presented by Treasury Secretary Ukur Yatani, were unique in many ways, considering the economy's hurting state and the uncertainty surrounding the country's emergence from the pandemic's impact.
The public expected the promises made, particularly on improving public welfare, supporting social services, and increasing gross national wellbeing, to be implemented as outlined in the Budget.
This expectation was based on the tax and spend principle, where the public expects tax revenues to fund public goods, improve the ease of doing business, create jobs, and make Kenya's economy competitive.
Although a significant portion of the Budget would be supported by debt and donor funding, unlike in previous administrations, the public expected those responsible for borrowing and spending to do so conscientiously, ensuring the public received value for money and the country was not saddled with unsustainable debt.
Already, the debt burden had emerged as a critical question in public discourse, with the country intending to borrow more in the coming year, causing jitters.
Indeed, it was disturbing that while the government expected to collect Sh1.6 trillion from tax revenues, it intended to spend Sh904 billion servicing debt in that period.
Furthermore, the proportion of the Budget earmarked for recurrent expenditure was high compared to the amount set aside for development spending.
In the medium and long term, the Treasury should find ways to narrow this difference.
Ultimately, the success or failure of the government's Budget plans would be determined by the Treasury's fidelity to its own estimates and estimations.
