Yatani’s budget sends the right signals

Treasury Cabinet Secretary Ukur Yatani’s 2020 budget policy statement released last week stirred concern among  parliamentarians who felt that some of the proposals would hobble new development projects and undermine on-going ones.

Specifically, he proposes to allocate Sh587 billion for development expenditure, down from Sh686 billion in the 2019 budget. It is a significant amount of money but one that should not prompt disgruntled murmurs given the appalling record that government ministries and departments have for underspending even the little they get in the first place.

More critically, the minister is starting a journey that his predecessor in particular was unwilling or unable to take because of political reasons. The kind of expansionary budgets that Mr Henry Rotich presented with great flourish were just numbers intended to create illusions of growth but were in fact gigantic banana peels that have plunged the country into depths of debts that will demand a lot of blood, sweat and pain to get out of.

In the 2020 budget alone, Mr Yatani is setting aside a colossal Sh630 billion (more than is earmarked for development) towards debt repayment. And this figure will probably grow in the coming years before it starts coming down.

Some of the concern raised related to the impact the cuts will have on President Uhuru Kenyatta’s legacy projects in health, agriculture, housing and food security. Projects under the Agenda Four programme got Sh4.8 billion in the 2019 budget. I am sure they will get some cash this year too. That notwithstanding, government departments are under a general direction to ensure that the Agenda Four projects get favourable allocations.

The concerns and the short-termism approach being deployed in the execution of the legacy projects is, in my view, misplaced. The statistical targets placed against each of the 4 items (100 per cent health coverage for all Kenyans; 500,000 housing units by 2022; food security for the now 50-plus million Kenyans; and increase manufacturing contribution share of GDP from the current 9 per cent to 15 per cent) are unattainable.

Two years to the end of the term of President Kenyatta, barely one per cent of the targets have been met. The government in January announced completion of the first 228 housing units out of the 1,370 under construction at the Park Road Project in Nairobi. There is of course frenzied activity in government and county offices to define the parameters of engagements between the public and private sectors that will build the houses.

But government decision-making is notoriously slow and opaque, which is why setting the targets as was in these instances is somewhat bizarre.

In health, the painful contortions that the National Health Insurance Fund is going through because of governance issues renders it ineffective as a key driver of the universal health coverage plan. The pilot schemes rolled out in several counties may have demonstrated hope but coordinating the efforts across all the partners that must be involved and resourcing the efforts fully and sustainably is not a 24-month assignment.

Manufacturing is buffeted by high costs of doing business, policy implementation gaps that are undermining efforts to attract and retain investments in high potential industries like textiles and apparel, value addition in agricultural products and the vast opportunity in the blue economy. The high level National Investment Council formed under the Kenya Investment Policy that should expedite decision-making critical in these areas is yet to be seen or heard.

On food security, statistics place around 10 million Kenyans not eating well or at all. That number will increase in the short term because the heat-induced change in weather patterns have thrown farming calendars into disarray, affecting harvest. And now there is the locust menace.

We have argued before that the narratives around the President’s legacy agenda should be recast. Uhuru Kenyatta can only try to leave a legacy that ensures that all these great objectives are achieved over time and in a sustainable manner.

He could do these by injecting fiscal discipline in his administration, ending cash haemorrhage through corruption, force a positive work ethic, etc. His Treasury chief is making the right moves and it is good that Parliament endorsed the budget policy statement.

Tom Mshindi is the former editor-in-chief of the Nation Group and is now consulting., @tmshindi