Kenyans react to the 2021-2022 budget over the high cost of living

Treasury CS Ukur Yattani

By The Weekly Vision Team

A section of Kenyans reacted in fury at the 2021-2022 Budget read by Treasury CS Ukur Yattani, they have castigated the government for doing little to create jobs for millions of the unemployed youth.

Many young people are unimpressed by the Kazi Kwa Vijana allocation saying most of the money that had been allocated for the programme in the past ended going into pockets of corrupt bureaucrats who in addition, hire friends and relatives in addition to demanding bribes before employing anyone.

A top-ranking official at the NGO Council, Mr Stephen Cheboi told a zoom Virtual conference of stakeholders that the rich-poor gap in Kenya, one of the highest in the world, had reached alarming proportions and need urgent redressing. He said that only 10 per cent of wealthy individuals in Kenya control 80 per cent of the national wealth, while the remaining two-thirds of the 50 million-plus Kenyans live below the poverty line. Living on less than Kshs 100 a day. “Why does the treasury keep on allocating huge resources into the hands of those already well endowed?” He pondered to an attentive audience.

CS Yattani announced several items had been exempted from VAT, these items include bread, Health products and technologies. The CS also announced a transitional VAT exemption on goods used in power generation under power purchase agreements

Cheboi said the high cost of living and unemployment was a “ticking time bomb” in Kenya and needs urgent remedy blaming state bureaucrats for stealing public funds, an issue that he blames for inequalities in the social-economic wellbeing in society. The economic situation has been worsened by the Covid-19 pandemic which resulted in high inflation rates and massive job losses after a near-global shutdown to tame the spread of the virus.

In the 2021-22 budget, the CS announced several items had been exempted from VAT. These items include bread, Health products and technologies. The CS also announced a transitional VAT exemption on goods used in power generation under power purchase agreements.

But while some recognized the slight positives in Yattani’s Sh3.66 trillion 2021-2022 budget, most people have expressed displeasure. Some said Yatani’s budget, which is a nine per cent increase from Sh3.36 trillion in the current year, will not spur the recovery of the economy from the Covid-19 shocks.

Many Nairobi residents who spoke to The Weekly Vision said they were disappointed that the government did not reduce prices on more essential items. They said the common Mwananchi was not considered in that budget. We pay high taxes and remain with nothing at the end of the day,” said Peter Mutuku a businessman in Nairobi. Alfred Onyango Omosh, a matatu driver said he expected a reduction in fuel prices in the new budget and was disappointed when it was not read.

“Fuel prices are frustrating our jobs. Due to the high prices, we have been forced to hike fares which have forced some to opt for other means of movement,” he said. Currently, super petrol retails at Sh126.37 per litre, diesel at Sh107.66, and kerosene at Sh97.85 per litre in Nairobi.

They fault CS Yattani for allocating huge sums of money to state agencies that multi-lateral lenders had advised the government to sell off to reduce the bloated wage bill.

Highlights in Kenya’s 3.6 trillion budget include

  1. 1.Ksh142.1B to support the implementation of the Big Four agenda.
  2. Around Ksh3.2 billion was allocated to DPP, DCI Ksh7.6 billion, Ksh5.9 billion Auditor General as Parliament gets Ksh37.9 billion to enhance graft war.
  3. There was a boost for Sports as CS Yattani allocates Ksh15bn to Sports Fund and Sh90mn for the refurbishment of regional stadia.
  4. He also announced a Ksh14.3 billion allocation to bolster COVID containment efforts. An additional Sh121.1 billion was allocated to the health sector to support various programs.
  5. The CS also stated digital lenders the government has through the Central Bank of Kenya amendment bill 2021 proposed to provide for licensing of digital credit service providers.
  6. CS Yatani also directed ministries, departments & agencies at the county gov’t to clear all their pending bills by 30th June 2021.
  7. Ksh23.1 billion set aside to cushion the vulnerable during the Covid-19 pandemic. Out of this Sh3 billion has been set aside for Kazi Mtaani program, Sh1.9 billion for agriculture, Sh1.2 billion for recruit of health workers.
  8. Ksh 38 billion was allocated for water and sewage infrastructure, Ksh 10.5B for irrigation and reclamation.
  9. He also announced that Kshs 200 million was allocated for the development of the Konza Technopolis master plan.
  10. Ksh 41.1 billion allocated for CDF, Ksh 2.1 billion for National Government Affirmative Action Fund.
  11. To step up the war on crime, National Treasury has set aside Ksh 1.5 billion for the National Communication and Surveillance System.
  12. Ksh 281 billion was allocated for TSC, 76.3 billion for university education, Ksh745 million for TVETs and Ksh323 million for National Research Fund.
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