The National Treasury unveiled the national budget estimates for the financial year 2014/2015 on Wednesday.
The proposed Budget estimates which were tabled in Parliament intend to allocate Sh866 billion to civil service salaries and Sh487 billion to development projects — including roads, railways and electricity connections — in the next financial year.
Sh320 billion will be used to repay debts. The allocation proposed for development expenditure has been increased to 36 per cent of the total expenditure which is projected at Sh1.8 trillion.
Recurrent expenditure stands at Sh866 billion taking up 64 per cent of the Budget.
The transport sector will be the largest gainers with Sh117 billion set aside to fund the ongoing road construction projects countrywide. Part of the money will be used to subsidise private investors who will be given major roads to build, manage and maintain. They will recover their investments by charging user fees. In total, transport and logistics has been allocated Sh125 billion.
Other projects that will get significant allocation if Parliament approves the Budget estimates is the standard gauge railway which has been allocated Sh19.4 billion. The money is meant to set in motion the construction of the Mombasa-Nairobi segment of the line that will eventually end in Kigali, Rwanda, through Uganda.
Chinese Prime Minister Li Keqiang is expected in the country next week for a state visit and top on his agenda will be to sign the final agreement tofinance the construction of the railway. China is expected to fund 85 per cent of the Sh327 billion project through a loan.
Geothermal power generation has been allocated Sh10 billion in a bid to reduce the cost of electricity while also lighting up more homes and schools, especially in rural areas. The generation of more power is expected to reduce the cost of electricity by 20 per cent, hence increasing Kenya’s industrial competitiveness in the region, a move expected to spur investments and create jobs.
Kenya needs to cut its cost of power if it is to be competitive in attracting investment. Ethiopia’s cost of energy currently stands at US3 cents per Kw/h compared to Kenya’s US20 cents per Kw/h.
Another Sh34 billion will be used to fund other power generating activities across the country.
The irrigation project will be taking home Sh9.5 billion, with eyes on the one million Galana Kulalu irrigation project at the Coast, which was launched earlier in the year. The money is also supposed be used to fund other ongoing irrigation projects countrywide and transform agriculture from subsistence to commercial farming.
Under the project, 500,000 acres will be put under maize, 200,000 acres under sugarcane, 150,000 acres for livestock and wild animals, 50,000 under horticulture, 50,000 for dairy farming and 50,000 for fruit farming.
The Treasury also proposes to spend Sh13 billion on flood control and water harvesting. Out of this, Sh8.2 billion will go towards the construction of water pans and dams.
Other allocations include the Sh226.7 billion to be shared out to the 47 counties alongside an additional Sh33.4 billion for regional development.
Agriculture services will receive Sh53.3 billion. Constitutional commissions will get Sh177.4 billion, with the Teachers Service Commission receiving the lion’s share of Sh165.7 billion. The Judiciary willget Sh18.5 billion and Parliament Sh19.2 billion.To finance the Sh1.8 trillion — which will be the largest in Kenya’s history — the National Treasury expects the taxman to collect Sh1.17 trillion. This will be 20 per cent more than what the revenue authority targeted to collect this year.
National Treasury Cabinet Secretary Henry Rotich (Pictured above) said that the taxman was expected to expand their revenue base and institute mechanisms to curb tax evasion.
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