ECONOMIC RECOVERY PLAN

Inside Uhuru's Sh54bn post-pandemic stimulus package

Government intends to build more classrooms, hire youths and health workers.

In Summary

•Treasury CS Ukur Yatani seeks to mop up Sh12.3 billion from parastatals and state departments.

•Nairobi Metropolitan Services to get Sh26 billion.

Treasury CS Ukur Yatani
Treasury CS Ukur Yatani
Image: EZEKIEL AMING'A

The government is seeking an additional Sh86 billion to rejig the economy, reopen schools and cushion Kenyans from the effects of the coronavirus pandemic.

The money will be used to build classrooms to create more space for learners when schools reopen and hire 100,000 youths for menial jobs in major towns.

 

President Uhuru Kenyatta's administration is seeking the money to help Kenyans get back on their feet following the adverse effects of the pandemic on the economy.

Treasury wants to raise Sh86 billion, of which Sh26.4 billion will go towards funding operations of the Nairobi Metropolitan Services. 

Cabinet Secretary Ukur Yatani wants Parliament to factor the additional request in the financial year 2020-21 budget. 

The gist of the new budget request is to enable students to resume learning, boost hospitals’ capacity and fund water and road projects.

“They will be funded through budget realignment, donor aid, and mopping up surpluses from parastatals,” Yatani said in a communication to Parliament.

Massive budget cuts await ministries, state departments and agencies following the fresh proposal. 

The CS seeks to raise Sh29.8 billion by restructuring the budget – of which Sh21.4 billion is already available. Another Sh12.3 billion is expected in surpluses from state corporations.

 

Of the Sh54 billion allocated to the post-Covid-19 Economic Stimulus Package, Sh19.5 billion is intended for development and Sh36.7 billion for recurrent expenses – meaning more money in the pockets of wananchi.

In this regard, the outlined hospital, schools, roads, and water projects will use local labour as a way of ensuring more youths get jobs.

The government intends to spend Sh10 billion on hiring 100,000 youths for menial jobs in Nairobi, Kisumu, Mombasa, Nakuru, Eldoret and other towns.

Uhuru further intends to build additional classrooms in 300 secondary schools at Sh2.1 billion, ostensibly to increase space for learners.

Also lined up is the provision of 250,000 locally fabricated desks for secondary schools at Sh4,000 each.

Documents from the National Treasury show that the government will hire 10,000 more teachers at Sh2.4 billion instead of the 5,000 it had planned.

At least 1,000 ICT interns will also be hired to support digital learning in public schools at a cost of Sh300 million.

President Kenyatta’s administration further intends to recruit 5,000 interns – set to earn Sh20,000 per month, to boost capacity of various hospitals.

Also in the budget is a proposal for 20,000 beds for public hospitals at Sh500 million as well as 50 modern walk-through sanitisers at border points and hospitals at Sh25 million.

The requests forecast how life is likely to change after the Covid-19 pandemic.

Yatani seeks an additional Sh900 million above the available Sh2.9 billion for water projects including wells, water pans and underground tanks in ASAL areas.

Other interventions will be on rainwater harvesting, community irrigation, flood control and tree planting in schools.

At least 200,000 small-scale farmers will get subsidies on farm inputs through the e-voucher system at a cost of Sh3 billion.

Yatani has injected Sh470 million to enhance the Kenya Meat Commission's working capital and another Sh1.5 billion to cushion flower and horticultural producers.

The government has also proposed Sh1 billion in grants to community conservancies and another Sh1 billion for Kenya Wildlife Service to engage 5,500 scouts for a year.

Kenya Tourism Board has been allocated Sh1 billion for post-Covid-19 tourism marketing whereas Sh3 billion will be set aside for hoteliers to renovate their premises – through the Tourism Financing Corporation.

Local businessmen are set to reap from a proposed Sh5 billion allocation for Value Added Tax (VAT) refunds.

Yatani has also asked MPs to approve Sh5 billion for payment of pending bills of less than Sh3 million and another Sh3 billion to operationalise the credit guarantee scheme.

The government also intends to purchase 400 locally assembled cars for use by ministries, state agencies and departments.

Treasury further wants MPs to okay Sh712 million for loans to SMEs in the manufacturing sector and Sh1 billion to enhance cash transfers.

Apart from the Covid-19 stimulus package, Yatani has asked MPs to approve Sh26.4 billion for the Nairobi Metropolitan Services.

The budget will be funded under the presidency, pushing allocations to Uhuru’s office up to Sh36.9 billion.

The CS wants MPs to further inject into the presidency budget Sh1.35 billion for operations and development.

Treasury also wants Sh1.5 billion for upgrading Mukuru slum, with Yatani applying to move Sh4.5 billion for vehicle leases from the Interior docket to his ministry.

Police are also set for a shot in the arm with an additional Sh2.5 billion in funding for operations, maintenance and development.

However, the adjustments stand to escalate the levels to which Covid-19 has distorted President Kenyatta’s budget plans for 2020-21.

Yatani had already presented to Parliament a Sh3.05 trillion budget comprising the Executive’s Sh1.8 trillion. Parliament was allocated Sh35.2 billion, Judiciary Sh18.05 billion, Sh316.5 billion for counties and Sh927 billion to the Consolidated Fund.

But with the new proposals a number of projects are set for funding cuts, including the planned construction of subcounty treasuries at Sh50 million.

Some Sh1.25 billion will be deducted from allocations to the Lapsset project, including Sh50 million that was set aside for the Mtongwe ferry channel.

A total of Sh2.5 billion will be deducted from the Water ministry budget affecting dam projects at Mwache, Thwake, Yamo and Siyoi Muruny.

Sh500,000 will be deducted from the Lands ministry affecting the processing of land title deeds, digitisation of registries, and construction of new registries.

ICT projects worth Sh1.05 billion will also be affected in the changes that will also see the Agriculture ministry lose Sh630 million from its allocation.

Street lighting projects that were planned for Kisumu, Nakuru and Eldoret will also lose Sh500 million and another similar amount for the Loyangalani-Marsabit high voltage line.

Some Sh370 million that was set aside for early oil pilot scheme has been deducted while LPG distribution venture has been slashed by Sh130 million.