Ten winners and losers in this year’s budget

National Treasury Cabinet Secretary Ukur Yatani unleashed a Sh2.8 trillion budget, balancing the tricky matrix of safeguarding lives and engineering economic recovery. The CS targets to collect Sh1.9 trillion, equivalent to 16.8 per cent of GDP. With over 3,000 people infected, the health crisis is now becoming an economic hazard, with cessation of movement. Here are the winners and losers in CS Yatani’s economic gamble.

WINNERS

1. Healthcare

The ministry which is crucial to combating Covid-19 saw its budget increase by Sh21 billion to Sh114 billion compared to the Sh92.7 billion allocated in 2019/20. Medical services, including ambulance services, dental procedures and nursing were exempted from Value Added Tax (VAT).

2. Infrastructure

Despite the tough times occasioned by Covid-19, infrastructure received an extra Sh44.1 billion at a time when most other departments received cuts in funding. In the budget, the department for infrastructure received Sh237.9 billion comprising Sh61.2 billion for recurrent expenditure and Sh176.6 for capital expenditure. 

3 Economic Stimulus Package 

 The programme, aimed at reinvigorating the economy which has been badly hit by the Covid-19 pandemic, received an extra Sh2.9 billion to reach Sh56.6 billion up from Sh53.7 billion announced earlier. Through the programme, the government intends to hire 200,000 youths to clean towns, 10,000 teachers, 5,000 health workers, 1,000 ICT interns, 5,500 community scouts and thousands of casual laborers to rehabilitate roads across the country.

4 Crop development

State Department for Crop Development saw its budget increased by Sh17 billion. The boost to the department will help combat infestation and spread of desert locusts and the strategic food reserve.

5. Tourism 

Tourism, one of the sectors that have been hit hard by the Covid-19 pandemic received a boost with Treasury allocating Sh3 billion to support the renovation of facilities, Sh2 billion to hire KWS community scouts in addition to waiving landing and parking fees at Airports.

Losers

6 Big Four Agenda

Allocations to the economic blue print declined sharply in this year’s budget compared to last year. In the 2020/201 budget read recently, the Big Four agenda drivers and enablers were allocated only Sh128 billion down from Sh450 billion in the 2019/2020 financial year.

7 Digital economy

Firms operating in the digital economy will now have to pay 1.5 per cent tax as the government seeks to widen the tax base. However, it is not yet clear how this will be done and the matter remains controversial among tax experts.

8 Pensioners

The budget statement presented in Parliament last week proposes to subject monthly pension payments under the NSSF to tax and do away with the relief on Home Ownership saving plans.

9 Energy

The ministry saw its budget reduced by Sh21.5 billion despite its initiative to connect more Kenyans to the National grid. This comes on the back of a reduction in projected revenue collections for this financial year.

10 Water and sanitation 

The department saw its budget reduced by Sh7.3 billion despite the fact that good hygiene, which depends heavily on water availability, is crucial in the fight against Covid-19. However, it will be assisted in combating the pandemic by counties which received Sh316.5 billion.