Sound budget solution to Covid-19 challenges
Treasury Cabinet Secretary Ukur Yatani will this afternoon read the 2020/2021 Budget statement in Parliament.
This year’s financial statement is cast against a gloomy background of an economy ravaged by the coronavirus pandemic.
The ill-health of the economy was exacerbated by a locust invasion and floods which have heightened anxiety over the food security situation.
For instance, the government has to set aside a substantial amount of money to rehabilitate infrastructure destroyed by floods that claimed lives, destroyed property and left thousands homeless.
This is what Yatani in his inaugural budget statement has to be alive to. It will not be business as usual as he tries to balance the math of raising income and expenditure against the sorry backdrop of a battered economy and rising expenditure demands.
The taxman is expected to collect Sh1.6 billion within the taxable bracket in an economy littered with collapsing businesses and rising joblessness.
This as experts warn against a negative growth— the first since 1999 when a negative growth of -0.1 per cent of GDP was registered.
In the past, the government has relied on the goodwill of the donor community. Unfortunately, they, too, have been ravaged by the deadly virus.
The Yatani Budget is also being read at a time when the country is saddled with unprecedented public debt estimated at Sh6.2 trillion.
And what does this portend for Yatani? A tough balancing act in the face of looming referendum and election year disruption.
First, Kenyans are expecting a realistic budget that will cushion vulnerable people and ensure every single coin is put where it will have maximum impact.
Second, focus on a priority list by taming the penchant for huge projects that easily become cash cows for graft cartels.
Third, it must tame its appetite to borrow even as it works to have the pressing loans rescheduled in the post-Covid-19 recovery period.
Finally, the CS must stay on course with President Uhuru Kenyatta’s eight-point stimulus programme focusing on infrastructure, education, small and medium enterprises, health, agriculture, tourism, environment and manufacturing to help jump start the economy.
But the elephant in the room is lack of fiscal discipline and its attendant sister, corruption.
This must be addressed pronto if we are going to successfully navigate the difficult economic times.
