Agriculture sector big loser in budget
Agriculture is one of the losers in the fiscal expenditure estimates released by the finance minister Njeru Githae on Thursday, despite the fact that sector contributes 24 percent of Gross Domestic product.
Tax experts have raised concerns that the envisaged economic growth will continue falling short of expectations until the sector is well funded “There was no mention of extension services, debts waivers for farmers were too little for a real impact and nothing much on value addition, which leaves the sector with its recurrent financial challenges,” said Kuria Muchiru, Country Senior Partner at PwC Kenya.
Agriculture was allocated Sh53.5 billion accounting for less than 2 per cent of the budget, contrary to Maputo agreement which commits African countries to allocate at least 10 per cent of their budgets to agriculture to feed the continent. Kenya is a signatory of the agreement.
Ernst & Young Kenya chairman Gitahi Gachahi said the Sh8 billion for irrigation, Sh2 billion for famine relief and 5 billion for contingency measures are good attempts but misplaced it terms of priority and sustainability.
“If part of this money was utilised for building reservoirs and sustainable food production, these costs would not recur every year,” said Gachahi He said the potential of agricultural production remains unexploited due to lukewarm support from the state leading to acute food insecurity, seasonal inflation volatility arising from food costs, and stagnation in employment in the sector.
“Many of the Budget’s priorities resonate with what the private sector expects to see,” said Alphan Njeru, a partner with PwC Kenya and a public sector expert. “But we must ask why close to 60% of the 2011/2012 development expenditure was not spent. Now we have the constitutional authority to demand quarterly updates on the progress of implementation of projects outlined in the budget, to ensure resources are utilised for the intended purposes and on time," said Njeru.