Budget: Citizen's Guide
6
1 OFFICE OF THE DEPUTY PRIME MINISTER & MINISTRY OF FINANCE June 2011 BUILDING RESILIENCE, DEALING WITH EMERGING CHALLENGES — ADDITIONS TO SPENDING PLANS • KSh 7.3 billion for irrigation programmes covering various parts of the country • KSh 1.6 billion for water harvesting and construction of water pans. • KSh 1 billion for Agribusiness Fund to catalyze funding to agriculture • KSh 400 million for Livestock Development Fund to boost livestock development • KSh 2.1 billion to boost the current safety nets to cushion the vulnerable(disabled, orphans, older persons, and urban poor) • KSh 3.3 billion (first phase) to enhance pension for retired teachers and cushion them from rising cost of living • KSh 840 million for bursary (KSh 20,000 per child) to cover additional 200 poor students per constituency • KSh 300 million for sanitary pads to support girls in schools countrywide. • KSh 2.3 billion for basic services—water/ irrigation, health, solar power, slaughterhouses—in marginalized areas. • Additional KSh 3.7 billion (KSh 17.8 million per constituency) for CDF for completion of existing projects. • KSh 2 billion capital grants to cooperative societies to pay coffee debts • KSh 2.9 billion for expansion and updgrade of commuter rail in Nairobi and its environs • KSh 4.2 billion for resettlement of IDPs (all categories) SUSTAINING INCLUSIVE GROWTH FOR A BETTER KENYA BUDGET AT A GLANCE CITIZEN’S - GUIDE • Economic growth of 5.3% is projected for 2011, rising to 6.1% in 2012 and 6.5% in the medium-term. For FY 2011/12, this translates to an average growth of 5.7%. • Inflation averaged 4% in 2010, but expected to rise to average 9.3% in 2011 and thereafter ease to the 5% target in the medium-term. • Additional KSh 58 billion expenditure to ministerial spending plans for strategic interventions and cushioning the vulnerable. • Projected budget deficit of 8.8% of GDP for 2011/12, declining to 5% by 2013/14 . • Public debt projected to rise from the estimated KSh 1.3 trillion at the end of June 2011 to KSh 1.6 trillion in 2011/12. • The projected growth to create jobs slightly over half a million a year. • KSh 1.6 billion for job creation through support for labour intensive public works programmes, skills development and internship programme • Continued spending in social services—education (KSh 149.4bn) and health (KSh 64bn). Removing binding constrains for faster growth: • Continued investment in infrastructure (KSh 221.4 billion)—of which, energy (KSh62.7bn), roads (KSh 100.9), rail (KSh 3.3 billion for construction of Standard Gauge Railway and KSh 2.8 billion for upgrade of commuter rail), among others. • KSh 3.5 billion for police to boost security operations • KSh 20.8 billion for implementation of new Constitution including preparation of next elections. * Exclude domestic debt redemptions and external debt repayments.
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Citizen's guide to the Kenya National Budget 2011/2012
Transcript of Budget: Citizen's Guide
1office of the deputy prime minister & ministry of finance
June 2011
BUILDING RESILIENCE, DEALING WITH EMERGING CHALLENGES — ADDITIONS TO
SPENDING PLANS • KSh7.3billionforirrigationprogrammescoveringvariouspartsof thecountry
• KSh1.6billionforwaterharvestingandconstructionof waterpans.
• KSh1billionforAgribusinessFundtocatalyzefundingtoagriculture
• KSh400millionforLivestockDevelopmentFundtoboostlivestockdevelopment
• KSh2.1billiontoboostthecurrentsafetynetstocushionthevulnerable(disabled,orphans,olderpersons,andurbanpoor)
• KSh3.3billion(firstphase)toenhancepensionforretiredteachersandcushionthemfromrisingcostof living
• KSh840millionforbursary(KSh20,000perchild)tocover
additional200poorstudentsperconstituency
• KSh300millionforsanitarypadstosupportgirlsinschoolscountrywide.
• KSh2.3billionforbasicservices—water/irrigation,health,solarpower,slaughterhouses—inmarginalizedareas.
• AdditionalKSh3.7billion(KSh17.8millionperconstituency)forCDFforcompletionof existingprojects.
• KSh2billioncapitalgrantstocooperativesocietiestopaycoffeedebts
• KSh2.9billionforexpansionandupdgradeof commuterrailinNairobianditsenvirons
• KSh4.2billionforresettlementof IDPs(allcategories)
SUSTAINING INCLUSIVE GROWTH FOR A BETTER KENYA
BUDGET AT A GLANCE
CITIZEN’S - GUIDE
• Economicgrowthof 5.3%isprojectedfor2011,risingto6.1%in2012and6.5%inthemedium-term.ForFY2011/12,thistranslatestoanaveragegrowthof 5.7%.
• Inflationaveraged4%in2010,butexpectedtorisetoaverage9.3%in2011andthereaftereasetothe5%targetinthemedium-term.
• AdditionalKSh58billionexpendituretoministerialspendingplansforstrategicinterventionsandcushioningthevulnerable.
• Projectedbudgetdeficitof 8.8%of GDPfor2011/12,decliningto5%by2013/14.
• PublicdebtprojectedtorisefromtheestimatedKSh1.3trillionattheendof June2011toKSh1.6trillionin2011/12.
• Theprojectedgrowthtocreatejobsslightlyoverhalf amillionayear.
• KSh1.6billionforjobcreationthroughsupportforlabourintensivepublicworksprogrammes,skillsdevelopmentandinternshipprogramme
• Continuedspendinginsocialservices—education(KSh149.4bn)andhealth(KSh64bn).
Removing binding constrains for faster growth:• Continuedinvestmentininfrastructure(KSh221.4billion)—of which,energy(KSh62.7bn),roads(KSh100.9),rail(KSh3.3billionforconstructionof StandardGaugeRailwayandKSh2.8billionforupgradeof commuterrail),amongothers.
• KSh3.5billionforpolicetoboostsecurityoperations
• KSh20.8billionforimplementationof newConstitutionincludingpreparationof nextelections.
* Exclude domestic debt redemptions and external debt repayments.
2 office of the deputy prime minister & ministry of finance
DEALING WITH FOOD INSECURITY HEAD ON — GOVERNMENT TO INVEST BILLIONS INTO IRRIGATION PROGRAMMES COUNTRYWIDE
Faced with the current challenges of rising food prices, the government is investing billions of shillings to expand and construct irrigation projects countrywide and transform agriculture into business
The Government will spendKSh10.2billioninFY2011/12for expansion and construc-tion of new irrigation projectscountrywide. Completion of these projects will assure foodsecurity for Kenyans on a sus-tainablebasis.Kenyahasahugeuntappedpotentialforirrigationagriculture estimated at about1.7 million acres. To date only20percentof thishasbeenuti-lized. The Economic Stimulus
Programme irrigation projectssuccessfully brought an addi-tional 40,000 acres under ricecultivation in Bura and Mwea,andmaizeinHola.
To deal with food insecurityonce and for all, the govern-ment will invest huge amountsof money to expand and initi-ate various irrigation projectsspread throughout the country.KSh8.6billion is a conditionaltransfer to National Irrigation
Board to complete all the on-going irrigation projects, initi-ate new projects and fast trackcompletion of designs for newstrategicirrigationprojects.Thecompletion of on-going proj-ectswillbringunderirrigationatotalof 36,100acresof agricul-turallandthatwillbenefitabout560,000 households, while thenew projects will bring underirrigation about16,000 acres inthe2011/12outof 70,000acresweplantocompleteinthemedi-umterm.This interventionwillbenefitabout300,000Kenyans.
Towards transforming agricul-tureandlivestockintobusiness,the government has launchedanAgribusinessandLivestockDevelopmentFund,withanini-tialamountof KSh.1billionandKSh.400million,respectively.
The Agribusiness Fund is partof awiderprojectof KSh.5bil-lion Impact Investment Fundunder the Kenya IncentiveBasedRiskSharingAgriculturalLending(KIRSAL)tobeimple-mentedovera fouryearperiodinordertoleverageKSh.50bil-lion lending to agricultural sec-tor and rural development tar-getinganother1.5millionsmall-holderfarmersandover10,000agribusinesses throughout thecountry.
The operationalization of theprojectwill empower andposi-tiontheprivatesectorplayersintheagriculturalsectortodeliverpro-poor economic growth, di-versifyourexports,expandem-ployment, reduce poverty, andassurefoodsecurityonalastingbasis.
Irrigation farming will ensure food security for Kenyans
3office of the deputy prime minister & ministry of finance
SPENDING PLANS FOR 2011/12
• KSh149.4bnforeducationincludingfreeprimaryandfreedaysecondaryeducation,andteacherssalaries
• KSh64bnforpreventiveandcurativehealthservices
• KSh13.3bnforsocialsafetynetincludingcushioningthevulnerablefromcurrentchallenges
• KSh.2,000MonthlyCashTransferfortheelderly
• KSh100.9bnforroadsandKSh62.7bnforenergy
• KSh33.3bnforagriculture• KSh57bnforenvironment,waterand
irrigation• KSh10.2bnforIrrigation• KSh6.1bnforconstructionof new
railwayline(StandardGauge),andcommuterrailservicesinNairobi
• KSh9.3bnforjudicialreforms• KSh8.1bnforparliamentaryreforms• KSh60.5bnforprovincial
administrationandpoliceservices• KSh15.8bnforHomeAffairsand
prisonservices• KSh58.4bnfordefenseandnational
securityintelligentservices• KSh12.1bnforIIECandnextelection
SAFETY NET FOR THE VULNERABLE
SCALING UP YOUTH EMPLOYMENT PROGRAMMESTheGovernmentwillspendKSh1.8billionfor Kenya Youth Empowerment Projectcovering labour-intensive works and socialservices. This will reduce the vulnerabilityof unemployed youth through expansionand enhancement of the Kazi kwa Vijanainitiative.
The additional amount of money will en-hancethecoverageof theprogrammeandtargetyouthsagedbetween18-35yearsun-dertheKKV.Itaimstoputmoneyintothepocketsof ouryouthswhileatthesametimeenhancing community access to social andeconomicinfrastructure.
Privatesectorfirmsofferinginternshipandtrainingplacementforyouthwillalsobenefitfromtaxrebatesfortrainingandpassingontherelevantworkexperienceandenhancingtheemployabilityof theyouth.
Privatesectorfirmsarecalledupontorecip-rocateandavailopportunitiesforinternshipwhilealsoharnessingonthepotentialof theKenyanYouth.TheImplementingAgenciesincludeOfficeof thePrimeMinister,Min-istryof YouthAffairs, andother linemin-istries,whileKEPSAwillprovideananchorfortheprivatesectorinvolvement.
HOW MUCH IS GOING TO BE SPENT?
CUSHIONING THE POOR FROM THE CURRENT HIGH FOOD PRICES
KSh13.3billionhasbeen allo-cated tocushionthevulnerablemembers of our society fromthecurrenthighpricesof foodandfuel.Partof thealloca-tions comprise additional Ksh385 million for cash transferprogrammetargetingthephysi-cally challenged persons, Ksh.260 million for orphaned andvulnerable children and Ksh.470million for the elderly per-sons,amongothers.Forthelat-ter, the amount include an up-wardadjustmentof themonthly
transferstoKsh.2,000asrecent-lydirectedbyParliament.
The2011/12budgetalsopro-videsarelief tothewillingandabletoworklowincomehouse-holds in the informal settle-ments in our main cities of Nairobi,MombasaandKisumu.TheGovernment has allocatedKsh. 845million to the UrbanFood Security Program cur-rently funded by theEuropeanCommissionandAFD.
The program was launched in
2008 focusing on improvingurban food security throughsackgardening inslumareas inresponsetosoaringfoodpricesand increased food insecurityamongurbanslumdwellers.
Theamountwillgotowardsthepurchase and provision of twoemptysacks,soil,pebblestones,manureandseedlingof anyveg-etables to each household cov-ering80,000households infiveurban slums inNairobi, 50,000households covering three
slums in Mombasa and 50,000households covering two slumsinKisumu.
Thisprojectwillnotonlymakethese households food secure,butalsoprovideasourceof in-come,savingsandaboveallcuretheragingfood inflation inourcities.Italsohasenvironmentalbenefits through use of wastewater, greening of the slumareas and relocation of wastedisposal to designated areas tocreateroomforsackgardening.
4 office of the deputy prime minister & ministry of finance
PRO-POORSPENDING
• KSh8.3bnforfreeprimaryeducation• KSh18.5bnforfreesecondary
education• KSh32.3bnforpreventivehealth
services• KSh31.7bnforcurativehealthservices• KSh103bnforteacherssalaries• KSh23.1bnforlabour-intensivepublic
worksprogrammestosupportyouthemployment
• KSh.2,000MonthlyCashTransferfortheelderly
• KSh2.7bnforprovisionof basicservicesinmarginalareas
• KSh17.2bnfornewallocationof CDF• AdditiontoCDFof KSh5.5bn(KSh26.4millionperconstituency)forcompletionof ongoingprojects
• KSh475millionforconstructionof waterharvestingsystemsin10primaryschoolsperconstituency
• KSh1.1bnforconstructionof waterpans
• KSh100.9bnforroadsector• KSh62.7bnforenergyinvestments• KSh10.2bnforexpansionand
constructionof irrigationprojectscountrywide
• KSh33.3bnforagricultureservicesandKSh1bnforAgribusinessFund
• KSh3.3bnforconstructionof StandardGaugeRailline
• KSh2.8bnforconstructionof commuterrailinNairobianditsenvirons
EQUITY AND REGIONAL BALANCE
PRO-GROWTH SPENDING
INVESTING IN PEOPLEHumanresourcedevelopmentisakeyfoun-dation for national socio- economic trans-formation. To deal with the current chal-lenges,governmentwillcontinuetoallocateasignificantamountof resourcestoeduca-tion and healthwhile ensuring its efficientusetopromoteservicedelivery.
The government has upscaled the bursaryprogrambyKsh.840milliontocaterforad-ditional 42,000 orphans and children frompoor households in secondary schoolsthroughout the country. This initiative isoverandabovethecurrentbursaryschemes
beingadministeredbytheCDFandMinistryof Education.
In addition to FPE expenditure, Ksh. 300millionhasbeensetasideforsanitarypadsto support girls in public schools country-wide.Thiswillgoalongwaytosupportfreeprimary education and ensure that no girlchildmissesschooldaysduetomenses.
To enhance water harvesting in schools,Ksh.475millionhasbeenallocatedasacon-ditionalgrantundertheMinistryof Educa-tionforschoolscountrywide.
DEVELOPMENT FOR ALLNotingthat thedisbursementof CDFandLATFcomestoanendby2012, it iscriti-cal that constituencies complete ongoingprojectsinreadinessforhandovertocountygovernment. To this end, the governmenthas allocatedKSh 17.2 billion forCDF in2011/12, up fromKSh.14.3billion.A fur-therKSh.1.8billionas arrears toCDFhasbeenallocated,bringingthetotalallocationto CDF to KSh.19 billion, translating toaboutKSh90.5milliononaveragetoeachconstituency.
Above this, the government has extend-ed a conditional grant to the CDF Boardamounting to KSh.3.7 billion or KSh.17.8million per constituency toward comple-tionof on-goingprojectsundereducation,health,andsanitation.
REMOVING BINDING CONTRAINTS TO FASTER GROWTH
Whiletheprojectedgrowthof about6%inthe medium—term will create jobs slightlyoverhalf amillionayear,thegovernmentiscognizant that our economy needs to growmuchfasterattherateof 10%envisagedinVision2030tocreatemorejobsinordertomeaningfullydealwiththecurrentchallengesof youthunemploymentandpoverty.Tothisend, and because of limited resources, thegovernment will focus on removing bind-ingconstrains to fastergrowth,whileat thesametimetakingmeasurestoincreaselaborabsorptionandemployabilityof ouryouth.
Thebudget for2011/12provides forKSh1.8 billion for job creation through sup-portfor labour intensivepublicworkspro-grammes,skillsdevelopment,andinternshipprogrammes.
On removing binding constrains for fastergrowth,thebudgetprovidesfor:
• ContinuedinvestmentininfrastructuretotalingKSh221.4bn—withenergy(KSh62.7),roads(KSh100.9),rail(KSh6.1billionforconstructionof StandardGaugeRailwayandurbancommuterrail),inordertoimprovetheinvestmentclimateandreducethecostof doingbusiness.
• AdditionalKSh3.5billionforpolicetoboostsecurityoperationstoensuresecurityof allpersonsandproperty.
• KSh20.8billionforimplementationof newconstitutionincludingpreparationof electionstoensuretransparent,responsive,accountable,efficientandeffectivenationalandcountygovernments.
5office of the deputy prime minister & ministry of finance
know wHERE YoUR TAX MonEY IS GoInG
Economic Affairs
KSh 102.4 bn.
Special Prog.
Ksh 36.2bn
PublicAdm.
KSh. 112.9 bn
Safety Net
KSh 5.6bn
Human Resourse Devt.
& Research KSh 290.6bn
GJLOS KSh. 121.5 bn
Agriculture Ksh. 33.3bn
Judiciary KSh9.3bn
Prov. Adm & PoliceKsh. 60.5bn
Trade, Tour-ism & Ind. Ksh. 12.1bn
CFS KSh 209.5bn
FPE Ksh 8.3bn
SocialServices
Ksh.326.8bn
Defence & NSIS KSh
58.4bn
PRO
-PO
OR
PRO
-GR
OW
TH
Physical Infrastructure KSh. 221.4bn
Education Ksh
149.4bn
FDSE Ksh 18.5bn Curative
Ksh31.7bn
HealthKsh 64bn
PreventiveKsh
32.3bn
Other incl. Research
Ksh 77.2bn
Physically challengedKsh 667mn
OVC Ksh 2.8bn
Gunny bags grants for Urban
poor Ksh 845mn
Olderpersons Ksh 1bn
Girl Child Ksh 300mn
HM & Prisons
KSh15.8bn
NationalAssembly KSh. 8.1bn
OtherKSh 15.7bn
RoadsKsh. 100.9bn
Energy Ksh. 65.7bn
OtherKSh 16.1bn
Transport KSh 17.4bn
Environ.,Water, & IrrigationKsh. 57bn
Foreign Affairs KSh9bn
Planning KSh 30.8bn
Finance KSh 62.9bn
Other KSh. 10.2bn
SGR & Com-muter Rail KSh. 6.1bn
Irrigation KSh 8.6bn
CCF KSh 2bn
IDPs KSh 4.2bn
Other Ksh 19.6bn
ESP—KSh. 12 bn
KKV—KSh. 1.8bn
Constitution Implementation KSh. 20.8 bn
Defense KSh 45.2bn
NSIS KSh 13.1bn
Other KSh.38.4bn
Other Ksh 24bn
TertiaryEducationKsh 53.2bn
Other30.6bn
IIEC KSh 12.1bn
HousingKSh 4bn
LATFKSh 17.3bn
CDFKSh 22.7bn
Other KSh8.1bn
Teachers salaries Ksh 103bn
MoF Opera-tions Ksh.
5.7bn
28.3%
10.5%
19.2%
8.9%
9.8%
18.1% 0.1%
5.1%NationalGovernment
BudgetKSh. 1,155 billion
100%
See Page 6 for key to abbreviations
6 office of the deputy prime minister & ministry of finance
OFFICE OF THE DEPUTY PRIME MINISTER AND MINISTRY OF FINANCE TREASURY BUILDING, HARAMBEE AVENUE
P.O. Box 30007 - 00100, Nairobi-Kenya • Tel: +254 (0)20 2252299, 0733 660606 / 0728 338111Email: [email protected] • Website: www.treasury.go.ke
CCF Civil Contingency Fund
CDF Constituency Development Fund
CFS Consolidated Fund Services, includes Public debt
Service, Pensions and Salaries for Constitutional
Officeholders
ESP Economic Stimulus Programme
FDSE Free Day Secondary Education
FPE Free Primary Education
GJLOS Governance, Justice, Law and Order Sector
HM Home Affairs
IIEC Interim Independent Election Commission
KKV Kazi kwa Vijana
MOF Ministry of Finance
LATF LocalAuthorityTransferFund
NSIS National Security Intelligence Services
OVC OrphansandVulnerableChildren
SGR Standard Gauge Rail
NOTE:
• Figuresmaynotnecessarilyadduptototalsdueto
roundingoff.
• ForESPandKKV,thefundsarespreadinvarioussectors
• Other-refertothedetailedexpenditureestimatesfor
variousministries
• GreyColour:Spendingby3armsofGovernment
• Orangecolour:Spendingbymainsectors
ABBREVIATIonS
