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The Parliamentary Budget Office has given the government sound advice on why it should not cut back on development spending given that the global economy is experiencing a recession.

During such scenarios, governments are usually advised to pump in money into their economies by funding mega infrastructure projects. By so doing, they create jobs through contractors and suppliers and keep money in circulation. This is a tried and tested measure of ensuring that citizens remain active players in the economy and are shielded from falling into poverty because government financing supports job creation both directly and indirectly. Whereas there could be a rationale for the Kenya Kwanza administration to push for a reduction in development spending — as one way of keeping debt levels in check — this must not be done to the detriment of the economy. Treasury honchos should not forget that Kenya is still making its way from the deep hole left in its pockets by the prolonged Covid-19 pandemic, the ongoing drought and the electioneering that depressed investments last year.

That is why the message from PBO needs to be amplified as there is a risk that the government could find itself making a bad decision even if the intentions of the leadership are noble and meant to cure another grave ill. The last three years have witnessed an increase in the number of people who have either become poorer or have fallen into absolute poverty as a result of job cuts, slow economic growth and other factors, such as high cost of living arising from both internal and external shocks, such as the war in Ukraine. As such, it is important for government to pump in money into the economy by supporting infrastructure development and ensuring that majority of the contracts are awarded to Kenyan companies to ensure that the bulk of the money is not exported by foreign firms.

Secondly, it ought to give incentives to large-scale manufacturers to ramp up production so that they can absorb more workers. One way to do that is by keeping the cost of electricity in check and entering into agreements with various nations to give preferential market access for goods produced in Kenya as happens under AGOA. The key should be in finding and striking the fine balance between funding infrastructure projects on the one hand and keeping debt with the ceiling approved by Parliament. Striking that balance will be difficult but it is worth pursuing as it will be worthwhile in the medium term.